Directors and officer’s liability insurance helps protect your association, owners, executives and managers if individuals, competitors, third parties or government regulators make claims. A lawsuit against directors and officers most commonly occurs when, clients, competitors or others feel they suffered a loss in the value of their shares because of actions that the board or senior management took or didn’t take.
What You Should Do
- Consider Directors and Officer Liability Insurance
- Determine if there are any conflicts of interests among the directors. Directors and officers should avoid situations where their personal interest may, or appears to, conflict with the best interest of the company
- Directors need to be educated in the following:
- Antitrust, political contributions, harassment, and confidentiality
- There should be regular scheduled board meetings, including proper notice. Meeting minutes should be retained forever
- Utilize the services of a qualified attorney, insurance broker, and accountant to help you manage your risk.
- Consider Employment Practices Liability Insurance. Employment-related claims represent a high-visibility, fast-growing area of D&O liability
- Establish internal controls for accounting and financial reporting