Directors and Officers (D&O)

Standard business insurance policies are meant to help protect the business itself and cover any potential legal fees, settlement costs, and other expenses. However, directors and officers of businesses can still be personally sued by their employees, vendors, competitors, investors, customers, or other parties. That is why Aspen Insurance Agency strongly recommends that directors and officers (D&O) for many of our commercial clients to mitigate the risk of exposure. 

What is D&O insurance? 

Directors and Officer’s insurance is a liability protection that covers individuals serving on the board of directors and/or as an officer of the business, whether it is a for-profit business, privately held firm, not-for-profit organizations, or an educational institution.  There are many different types of claims that can be made against a business which may include it’s leadership as responsible and liable. For example, a company’s failure to comply with regulations and to provide a safe and secure workplace would fall under D&O protection.  

 Some other examples of claims that may specifically target the company’s leadership: 

• Shareholder suits over stock performance 
• Decisions exceeding the authority of an officer 
• Failure to comply with regulations or laws 
• Employment practices and HR issues 
• Cyber Liability 
• Breach of fiduciary duty 
• Misuse of company funds 

D&O insurance policy may include three types of coverage: 

• A-side coverage: Covers directors, officers and sometimes employees if the company cannot indemnify them. 
• B-side coverage: Covers the company when it does indemnify the losses of directors, officers, and employees.
• C-side coverage: Covers the entity or corporation financially and may reduce the limits available to protect the directors and officers. 

Upon considering your company’s exposure, you should select coverage based on its unique risks and how the business is organized.  Certain protections may be provided by your company’s bylaws or articles of incorporation, so it is important to seek guidance from a knowledgeable insurance advisor regarding this complex and important coverage. At Aspen we are happy to work with your legal team and/or chief finance officer to manage your insurance needs on an annual basis. 

Contact Aspen Insurance Agency in Denver, Colorado today to request a quote and find out more information. We offer policies in the following states: Arizona, California, Colorado, Florida, Hawaii, Idaho, Illinois, Indiana, Kentucky,  Michigan, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, Pennsylvania, Ohio, Oregon, South Carolina, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming.