Directors and Officers Liability Insurance provides financial protection for company directors and officers. This coverage applies when they face lawsuits regarding their actions in their respective roles within the company. Think of Directors and Officers Insurance as a management Errors and Omissions policy.
Directors & Officers Liability Insurance can usually include Employment Practices Liability and sometimes Fiduciary Liability. The former involves harassment and discrimination suits, and is where the majority of exposure will be.
People often confuse Directors and Officers Insurance with Errors & Omissions Liability. Errors & Omissions focuses on mistakes and negligence in products and services, not management's performance and duties. They are not the same. Generally, it is a good idea to carry both Directors and Officers Liability Insurance and Errors and Omissions Liability Insurance.
