Protect Your Assets With DO Policy
Whether you have a for-profit company or a nonprofit business, insurance is crucial to the survival of the company. There are several types of insurance policies that a business needs, but one of the most important is the D&O policy or the directors and officers insurance policy. Here is why you need this type of coverage.
Lawsuits Happen at the Management Level
If a client feels as though you were dishonest or that your negligence caused a financial loss, he or she may file a lawsuit against you. Some potential reasons that a person may sue someone in upper management include:
- Break of fiduciary duty
- Misuse of company funds
- Misrepresentation of company assets
Directors and Officers Can Lose Personal Assets
Without a D&O insurance policy, your assets could be at stake when someone files a lawsuit against you. Since you serve as a director or officer of a company, a client may file a personal lawsuit against you if he or she believes that you were negligent in the advice that you offered or the service that you provided. Without an insurance policy to pay the legal fees and possibly the settlement, you could lose personal assets to a client.
When it comes to your business, you need to protect upper management from the potential of lawsuits.