Any private company or organization can be sued by employees, shareholders, investors, vendors, or other interested parties
Reasons for claims can include misuse of funds, fraud, membership discrimination, defamation, breach of bylaws or antitrust violations
Having the right Directors’ & Officers’ coverage in place can be important to prospective board members
Policies with a combined single limit provide one limit to cover all directors & officers and employment practices claims. Having separate coverage limits for these two coverages assures that a claim against one will not deplete the limits for the other. $1 million is a common limit for most organizations when first considering Directors’ & Officers’ coverage.
Directors’ & Officers’ Side A Coverage: Covers directors, officers, and employees for personal liability that results from a wrongful act in the event that they cannot be reimbursed by the company. For example, in a declaration of bankruptcy, this level of coverage would cover costs the company cannot afford to or is unable to pay out.
Directors’ & Officers’ Side B Coverage: Covers the company for sums they are required by law to reimburse to directors, officers, and employees.
Directors’ & Officers’ Side C Coverage: Also known as entity coverage; this coverage protects the corporation itself.
Employment Practices Liability
Employment Practices Liability Insurance covers employers against claims by workers that their legal rights as employees of the company or organization have been violated. Some examples include sexual harassment, discrimination, wrongful termination, or breach of employment contract.