August 2007

Assess Your D&O Risk and Coverage

Those in line to become directors or executives of American companies have a right to be nervous. Increased scrutiny of business’ elite combined with litigiousness has forced many aspiring top officials to second-guess their company’s ability to defend their decisions.

Aspiring execs are worried about the growing difficulty some companies face to financially assist them when negligence or a lack of fiduciary responsibility is alleged. Executives, both current and future, are right to consider the following in assessing D&O risk:

• How have shareholders responded to adverse situations involving directors and officers in the past?
• How has the company responded to adverse situations involving directors and officers in the past?
• Has the company secured the protection of a directors and officers liability insurance policy? If so, to what extent will it cover the duties of this position?

Directors and officers liability insurance is rapidly becoming a staple in the commercial insurance portfolio of America’s businesses. If your business is currently without this coverage, consider how this valuable protection can help attract, retain and defend executive level talent in your company.