You must sell policies to your insurance clients. Therefore, it is natural that they will come to you with questions. Sometimes, they might want to know about the benefits of certain policies. If they ask about directors & officers insurance (D&O coverage), what should you tell them?
D&O insurance is an important piece of protection from which any business can benefit. It is especially important for company principals who have a lot of leeway over the business’s direction.
D&O Insurance in Brief
A directors & officers policy applies to some of the most-important people in the business. It might apply to CEOs, Presidents and members of your board. It will help them respond to certain claims, such as misuse of company funds or lack of corporate governance charges.
D&O coverage will apply to the insured business’s principals and their personal assets. It is not uncommon for these parties to become the personal targets of legal action in liability suits. D&O insurance can help these parties get a more specific level of protection for themselves.
Yet, why do businesses need D&O insurance? Clients might think they don’t need it. However, D&O policies usually can provide several key benefits.
They Protect Directors, Personally
If someone sues the business, they might name certain directors. This might leave the directors open to personal losses. Therefore, their income, their family and their livelihood might come under threat. D&O coverage can therefore help them cover themselves should they have to make personal remittance to affected parties.
It Covers the Business
D&O insurance usually applies to multiple parties within the business. Therefore, by getting coverage, a business decreases its own personal financial risks. If a director can avoid personal financial losses, so can the business. Therefore, coverage can put both parties in a more stable financial position.
It Increases Your Corporate Potential
By getting D&O insurance, the business creates more security for itself. It might also increase its own reputation and abilities.
When a business has D&O coverage, it creates protection for employees. Therefore, when looking to hire future directors, the existence of a policy might prove an inventive for employment. People might be more likely to work with a business if they know it will carry a D&O policy in their names. Coverage is so important, in fact, that many prospective employees will ask for the business to buy coverage before they will consider working for you.
At the end of the day, D&O insurance might prove one of your business’s greatest benefits. It can help you attract and retain talent that can take your performance to the next level.
Also Read: D&O Insurance Explained for the Healthcare Industry