Management liability is a big concern for business owners. Since directors and other top management personnel can be sued for a number of reasons, it’s wise to invest in a directors and officers liability plan.
Examples of Directors and Officers Claims
D&O claims can be filed by client’s, investors and creditors. Examples of common claims include:
- Stolen Proprietary Information – A board member decides to take proprietary blueprints from a customer and sell them to a competitor. When the customer discovers the theft, they sue the company for millions of dollars, even though the business owner had no prior knowledge of the incident.
- Negligence – If an officer of the company fails to file reports on time or files the wrong paperwork and this mistake results in financial hardship for a client, the client may file a claim of negligence and sue for exorbitant damages.
- Misrepresentation – A director lies about the financial health of the company in order to secure an investor’s funding. When the company goes bankrupt, the investor sues for misrepresentation and financial loss.
In each of these cases, a D&O policy would help to cover the legal fees and settlement costs.
Protect your company and your top management staff with a comprehensive directors and officers liability plan.