Look at Directors and Officers Insurance as Your Success Grows

Directors and officers insurance or D & O insurance is something you may not need right now for your new company but something, hopefully, you will require down the road as your young business grows and prospers. D & O insurance offers board members of companies, non-profits and homeowners associations financial protection in case they are sued on something related to their performance on the board. The D & O policy has been compared to an errors and omissions policy, which protects against performance failure of products, not management failures.

This type of insurance policy is usually bundled in with other coverages, such as employment practices liability and fiduciary liability. In order to attract a board of directors, you need to carry a D & O policy, or they will not participate. The reality is today that if you have employees, shareholders and customers, there is a good chance at some point of getting sued by one or more of them. The board members can be held personally liable for acts of the company, so D & O insurance becomes essential.

Investors in your company will also demand that you carry D & O insurance as a condition for investing in your new firm.

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