D&O Insurance Humble, TX
At Lee Insurance Agency in Humble, TX, we offer various liability insurance coverages to protect the board of directors, officers, and members in your company from lawsuits and the associated legal costs that may arise from their actions.
Our D&O insurance products cover your team’s personal assets and finances in case of a lawsuit from another employee, organization, customer, vendor, investor, or competitor. D&O insurance is critical for all organizations handling finances in today’s complex environment.
What Is D&O Insurance?
“D&O insurance” stands for directors & officers insurance. This insurance policy protects your company, particularly upper management individuals, from suffering financial losses due to a lawsuit. Your insurance company can cover settlements and legal fees related to a director or officer’s faulty actions.
If your company cannot repay financial losses due to a lawsuit claim, the insurance agency can cover the costs and protect any personal assets at risk. If your company does indemnify the individual, you can receive reimbursement for such costs through your D&O insurance.
Regardless of the process, your policy can cover monetary damages related to individual lawsuits or company-wide claims.
Who Needs Directors & Officers Insurance and Why?
While your company may have general liability or umbrella insurance coverage, such policies do not cover the actions of board member executives. Any company, from a start-up to a large enterprise that could be the target of financial mismanagement accusations should consider directors & officers insurance. Even non-profit organizations need protection from such accusations.
Some of the most common scenarios placing your board of directors and officers at risk of lawsuits include the following:
- Fiduciary duty breaches causing bankruptcy or financial losses
- Errors in reporting
- Inadequate or faulty disclosures
- Improper representation of company funds or assets
- Non-compliance with workplace, government, or city council laws
- HR complications relating to employment practices
- Intellectual theft
- Competitor customer poaching
- Inadequate corporate governance
You likely hold your board of directors and officers to the highest standards, but many of the above scenarios can arise by accident. With modern financial complexities, errors can easily slip through the cracks. Many individuals and institutions can hold you and your company financially responsible for something that may seem minor but has rebounding effects.
Growing organizations hoping to create an executive team often need D&O insurance to find suitable candidates. Many seasoned executives will not even consider a position unless they know they’ll have adequate coverage in case of a lawsuit.
D&O insurance can protect your company and your team from the following financial risks:
- Legal costs
- Representative expenses
- Costs relating to extradition proceedings
- Civil fines or penalties
- Incurred damages
- Bail expenses
What Does D&O Insurance Cover?
D&O insurance covers all past, present, and future officers and directors of the company. Typically, this includes all upper-management executives and members of your board of directors.
Your policy will cover the following costs:
- Allegations of wrongful acts
- Expenses related to defense costs
- Financial losses if the insured party is held liable for the action
D&O insurance will not cover illegal profits or actions. A few other scenarios may disqualify coverage.
Our insurance agents can help you select a policy that aligns with your coverage needs. Three main types of insuring agreements exist for you to choose from, including Sides A, B, and C.
Side A covers financial losses for executive individuals when your company cannot pay the expenses. Side B reimburses your company’s financial losses if it pays for the individual’s expenses. Most consider Side A and B the most standard, minimal coverage levels providing individuals with protection.
Side C covers your company as an entire entity rather than individuals if it suffers a lawsuit. You may select an ABC plan that covers all your bases for total end-to-end protection.
Get the Coverage You Need with Lee Insurance Agency
D&O insurance protects your company’s financial best interests and covers your executives from suffering financial losses.
Contact Lee Insurance Agency in Humble, TX, today at (281) 812-8400 to speak with our team and receive a free quote on D&O insurance for your organization.