Directors and officers in publicly traded companies face various risks, including potential legal action arising from alleged wrongful acts by company executives. These risks can include supply chain delays, cyber-attacks, economic volatility, and other unpredictable factors impacting a company’s operations and profitability. To protect themselves from these risks, public companies can invest in directors’ and officers’ liability insurance, which provides coverage for claims related to alleged wrongful acts committed by company executives. This insurance can offer peace of mind and security in an unpredictable business environment, allowing companies to maximize profits and operate under optimal conditions.
What is Directors and Officers Liability Insurance?
D&O insurance is a type of insurance that covers legal costs, investigation costs, and compensations that may be required of officers and directors. This insurance provides peace of mind and reduces the fear of lawsuits that may arise from the company’s day-to-day functioning. With directors’ liability insurance, directors can work in a professional environment and confidently make important company decisions.
What Does D&O Insurance in Public Companies Include?
The insurance provides coverage to the directors and officers of public companies for legal proceedings filed against them, which concern the decisions they took as part of the company’s business management. The insurance cost is a derivative of the risk, the assets, the financial situation, the claims history, the nature of the company’s activity, and the markets in which the company operates.