Directors And Officers Insurance - An Overview

If you are an officer or a director at a company - be it a large corporation or a small enterprise

, you are at risk of possibly facing high legal fees if someone should happen to file a claim against you. You would, in fact, be responsible for paying any legal fees straight out of your pocket if you are not carrying the right type of insurance.

Directors and officers insurance is a special type of coverage that protects you, as a high ranking business person, against any claim made against you as a result of a real or an alleged wrongful act of some type on your part, which occurred while you were carrying out your job responsibilities. It is very common today, due to a high degree of competitiveness in the business world, for all types of people from direct competitors to shareholders to put a lot of weight on the decisions you make as a director or an officer of your company. For reasons that are often unclear, it is not uncommon for a person holding an important position within a company to have claims filed against them directly and not against the business that they represent. Legal action can be taken quickly nowadays, and once a claim has been filed and is in the works, high ranking company officials can very suddenly realise that they are being targeted.

No matter where you work, if you are an officer or a director, you certainly have a great deal of responsibility riding on your shoulders. You are often faced having to make split second decisions and what you decide will usually dictate in part at least, how your company will run. Maybe you are directly responsible for the health and safety procedures at your company or perhaps it is your responsibility to secure your company's business data. Sometimes, no matter how much care you took while performing your job duties, there may be those occasions when others believe that you have acted outside of your job description - which can spur accusations that you have done something wrong that may have harmed someone in some way.

Or someone could accuse you of not doing enough, which may or may not have been the cause of someone becoming hurt. In the case of data protection, if someone's data had been compromised and it was your job to see to it that the data was secured, you could end up facing legal action being taken against you. These are just a few scenarios that could arise. It is therefore in your best interest to be sure that you carry an adequate amount of directors and officers insurance so that you are fully protected, no matter what may arise.

This insurance can also be tailored so that it covers legal costs that could come about as a result of criminal or investigative charges being filed. It is very common that both civil and criminal accusations are waged against company officials simultaneously, so it is a good idea to have this area covered when taking out a policy. Often times your direct competition will be tempted to seek legal damages against you, saying that you have acted unfairly in some way that has harmed their business either directly or indirectly. Directors and officers insurance is at your disposal and is designed to cover your back, so by all means take advantage of it.

by: Paul Delaney

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