Directors and Officers Insurance in NYC FAQ

Directors and officers insurance is essential for companies and non-profit organizations of all sizes, because anyone making a claim against an organization may make a claim directly against these individuals as well. There are many different parties who may make claims for a wide range of reasons, which is why D&O insurance has very broad coverage. Policies will include protection for all past, present and future directors and officers in for-profit and non-profit companies when damages arise due to alleged or actual wrongful acts committed within their positions. Errors of omission, misstatement, misleading statements, or breach of duty may all be covered under D&O policies. As you explore the right policy for your company or organization, consider these D&O insurance FAQs that may guide you to the right coverage.

Why Should Organizations Consider D&O Insurance?

Both private companies and non-profits should have D&O insurance if a board of directors has been assembled. Typically, investors will require this insurance as a condition of funding a private company, because the cost of corporate litigation may easily outweigh the net worth of a small company. For non-profit organizations, protection is essential for individuals who may have personal assets threatened when a claim is brought up.

What Are the Sources of D&O Claims?

  • In private companies – Shareholders, investors, customers, employees, and even competitors may make claims against a company for a number of reasons. Some of the most common include contract disputes, mergers that may reflect a conflict of interest, financial performance, copyright infringement, or competitor disputes. Because the risk of these claims may vary in different industries, it is important to work with a provider who will provide customized coverage to meet the needs of your business.
  • In non-profit organizations – For non-profit organizations, a leading source of D&O claims was employment-related issues pertaining to hiring and firing staff members. The right insurance policy will protect your organization as employment needs evolve.

What Exclusions Exist in D&O Policies?

While D&O insurance will provide coverage for defense expenses, financial damages, and settlements, it will not recover wages, fines, taxes, penalties, or multiplied damages. Any claim related to unlawful activity will also not be covered with a D&O policy.

If you are seeking D&O coverage in New York City, you can rely on Gross & Company Insurance to provide you with customized, client-focused service with more than 90 years of industry experience and client satisfaction behind our policies. To explore your group insurance needs with one of our professional associates, call us at (212) 620-0922.

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