Skip to main content

Directors and Officers Liability Insurance

Coverage for Leaders and Decision Makers

Directors and Officers Insurance: Liability Coverage for Organizational Leaders in Northeast Philadelphia

Home » Commercial Insurance » Directors and Officers Liability Insurance

Are your senior leaders, officers, and directors properly insured for the outcome of their decisions? Protect your top level of management and your company from claims and damages with directors and officers (D&O) liability insurance.

Insurance Coverage for the Risks that Come with Responsibility

The leaders who make decisions in any organization or company carry a big responsibility. They have a duty to act in the best interest of the entity at all times. These individuals are also at the most personal risk of legal action. When they make a decision that produces negative effects for the company, clients, employees, or others, they can be held personally liable for loss and damages.

Directors and officers (D&O) liability insurance provides coverage for both leaders and their organizations when those negative effects lead to a lawsuit. This protection prevents an individual’s personal assets from being drained to pay damages. It can be used to pay legal costs, damages, and to indemnify losses.

D&O Liability Coverage Considerations

D&O liability insurance is a valuable element to attracting qualified leaders, but it is important to keep in mind that it has limitations. D&O liability insurance does not cover criminal or fraudulent acts committed by directors or officers. Additionally, the policy will only cover senior leadership in most cases. Employee Practices Liability Insurance (EPLI) provides similar protection for mid-level managers and general employees.

Fiduciary and criminal insurance policies can be bundled in to cover the company’s losses when senior leadership is facing prosecution for a crime. This type of coverage protects the entity itself from a director’s intentionally wrongful acts.

The cost of a D&O policy depends on whether the organization is for profit or nonprofit, what kind of income and debt it has, and whether or not the company or its leaders have been sued in the past. An experienced insurance agent can provide insight about what to include in a policy based on each entity’s specific needs.

What Types of Organizations Need D&O Liability Insurance?

It is a common misconception that D&O liability insurance is specific to publicly traded companies. In fact, companies and organizations of all sizes carry enough risk to consider obtaining protection for their decision makers.

In large companies, investors generally require D&O insurance, as do prospective leaders when reviewing their compensation package. Privately held companies, small businesses, and even nonprofit organizations also benefit from this type of protection. Anytime people are in the position of making important decisions that affect others, they have the potential to cause adverse outcomes.

Nonprofits that are run by volunteer directors should especially consider carrying D&O protection. The individuals who invest their time into the good of the organization should be able to make decisions without fear of severe financial penalties for a mistake.

In a small or midsize business, D&O insurance does not only cover the owners of the company. It can also cover chief officers and other key decision makers. A crucial time to look at coverage is when the founder begins to share corporate management responsibilities with other top tier individuals, or during succession planning.

What D&O Coverage Options are Available in Pennsylvania?

Ultimately, any organization that has leaders, employees, vendors, or customers should review the available options for D&O coverage. The reality is that one mistake, contentious employee termination, broken promise, or discriminatory action can result in devastating financial consequences.

D&O liability insurance involves 3 types of coverage:

  • Direct coverage for the individual being sued if the company cannot cover the legal fees and any judgments
  • Reimbursement to the company for covering the legal costs of an individual
  • Coverage for the organization or company irrespective of what has been paid to cover an individual

Freedom Insurance Group offers commercial liability insurance for companies and nonprofits of all sizes in Northeast Philadelphia and the surrounding region. We gather all the relevant information about your entity before we determine the appropriate insurance coverage and research your best options.

We understand your need to protect your business and the leaders who make it successful. We work with multiple carriers in order to identify the policies that fit your budget and coverage priorities.

Contact our team to learn more about how D&O liability insurance can help you protect your position in the marketplace. The best way to get in touch is to give us a call at 215-673-0300, but you can also complete the form below, providing some basic information, and then a member of our team will reach out to you shortly. We look forward to serving you!

Freedom Insurance Group

Office Hours
Monday–Friday 9:00 a.m.–6:00 p.m.
Saturday 9:00 a.m.–1:00 p.m.

Directors and Officers Liability Insurance - Senior Leadership in the Boardroom

Get Started Today

As an independent agency, we are here to help you find the right Directors and Officers Liability Insurance coverage.

Get a Quote

  Directors and Officers Liability Insurance Quote Request

As an independent agency, we are here to help you find the right coverage.

  • Please do not include sensitive, private information in this area.
  • This field is for validation purposes and should be left unchanged.

Get a Quote

It only takes a minute to get started.

  • Fill out the form, we’ll be in touch.
  • Review options with an agent.
  • Get the coverage you need.

Would you rather discuss this in person? Get in touch with an agent today!