Products

DIRECTORS & OFFICERS LIABILITY

Private Company

Who should buy Private Company Directors and Officers Liability Insurance?
Corporations of all sizes need to have this coverage. In addition to the D&O exposures, they can also protect their EPL exposure through the purchase of a combination D&O/ EPL policy as the majority of claims are filed by employees. An organization with any of the following characteristics has a higher then average exposure to D&O lawsuits:

Contemplating an Initial Public Offering (IPO) or Private Placement
Providing loans to its Directors and Officers or key employees
Establishing a related business or doing business with a firm owned by a director, officer, employee, or family member
Shareholders with ownership interest in the Company but not a Director or Officer such as family members, investors, or former employees
Not having an annual audited financial review by a CPA firm

Claim
The Insured decided to expand and acquired a small company in a related field. After operating the newly acquired company for several months, the Insured realized that poor accounting and collection procedures had been in place for some time and sales projections were unrealistic. The decision to acquire the company and the purchase price were based on faulty information. A concerned shareholder consulted a CPA experienced in mergers and acquisitions and decided the Insured paid too much. The shareholder sued each of the Insured’s Board members for making an uninformed decision and failing to substantiate the seller’s information by consulting with appropriate experts. Before trial, the Insured settled the shareholder claim for over $200,000.

Click here to download an application for Private Company D&O liability and send your submission to PLUS today!