Directors and officers insurance protects board members and officers if they are sued for a decision they made on behalf of your tech company.
Similar to employment practices liability insurance (EPLI), directors and officers insurance is a type of management liability insurance. D&O safeguards your board members, directors, and officers from lawsuits over their management decisions.
If your board makes a poor decision or a bad investment, this policy ensures they won’t have to pay out of pocket to defend themselves in court.
Most general liability and errors and omissions policies exclude lawsuits filed by stockholders, employees, clients, or regulatory bodies against your business’s board members, directors, or officers. As a result, candidates for your board will usually require D&O insurance before they become members.
Potential investors may also require proof of coverage as part of their conditions for investing in your company.
If an employee makes an allegation of harassment, discrimination, or wrongful termination against your director, your business can lean on D&O insurance to cover the director’s legal costs, including a settlement or judgment for the employee.
If your board makes a management decision that negatively affects your stockholders, they could be accused of misusing company funds. D&O insurance covers the cost of reaching a settlement with stakeholders or, if need be, taking the case to court for a judgment.
If your compliance officer doesn’t adhere to industry regulations, a regulatory body could file a lawsuit against that officer. D&O insurance helps your business cover legal expenses, including court fees, attorney's fees, fines, and other claim-related costs.
Your board members, directors, and officers provide valuable insights on how to grow your business, invest your capital, and manage your employees. To attract talent, you must reassure potential board members that they aren’t risking their personal finances.
D&O insurance benefits your business because it ensures:
Some insurance providers offer a discount when you purchase directors and officers insurance with employment practices liability insurance. This management liability insurance bundle provides broad coverage against lawsuits related to management, employee rights, and executive decisions.
Check with a TechInsurance agent to see if your company qualifies.