directors' and officers' liability insurance

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Directors' and Officers' Liability Insurance

Insurance a publicly-traded company purchases to reimburse senior management, or the company itself, for damages and legal expenses incurred as the result of a lawsuit for negligence. For example, if the board of directors' actions led to a massive loss for the company resulting in a lawsuit, directors' and officers' liability insurance will cover the cost of the lawsuit for the company as a whole and the individual directors. It is important to note that directors' and officers' liability insurance does not cover intentionally wrong actions, only negligence. It is often called D&O insurance for short.

directors' and officers' liability insurance

A type of insurance taken to protect a firm's directors and officers against lawsuits—mainly suits instituted by unhappy shareholders of the firm. Directors' and officers' liability insurance has become more expensive and more difficult to obtain in recent years as the number of lawsuits has increased dramatically. Companies find it very difficult to recruit outside directors unless the candidates are supplied with liability insurance. Also called D&O Coverage.
References in periodicals archive ?
ACE recently released the white paper, "Trends in Securities Class Action Litigation and Directors and Officers Liability Insurance," which examines the number of class actions pending in federal courts during 2002, 2003, 2004, and 2005; the allegations involved, including specific accounting allegations; securities judgments; types of plaintiffs; and, the industries targeted.
Most recently, he was divisional vice president of National Union with global responsibility for commercial directors and officers liability insurance.
com) is once again the leading directors and officers liability insurance broker in the United States, according to the 2005 Tillinghast-Towers Perrin D&O Survey.
GPLM has recently revitalized its private company directors and officers liability insurance offering, and remains a leading market for Employment Practices Liability Insurance.
Corporate board members are concerned about losing their personal assets if the limits of their companies' directors and officers liability insurance are exhausted due to entity, D&O or EPL losses or defense expenses.
These risks and uncertainties include the final approval of the settlement, the ability of the Company to successfully implement improved corporate governance and internal controls and processes, which may not detect fraud or other material inaccuracies in the Company's financial statements, the primary insurer following through on its commitments, the company's ability to obtain the remaining proceeds of its directors and officers liability insurance, and the risks detailed from time to time in Riverstone Networks' SEC reports, including its quarterly report on Form 10-Q for the period ended November 30, 2002 and subsequent reports on Forms 8-K and 8-K/A.
Insurance will continue to underwrite directors and officers liability insurance (D&O) and other specialized coverages for commercial accounts, while a team of experienced professional lines underwriters in New York City has been assembled to concentrate exclusively on financial institutions accounts.
In January 2003, Arch announced the formation of a new $40 million facility for Side-A Directors and Officers liability insurance, offered in addition to Arch's existing $25 million capacity for standard D&O liability coverage.
These risks and uncertainties include the final approval of the settlement, whether the primary insurer follows through on its commitments, the company's ability to obtain the remaining proceeds of its directors and officers liability insurance, and the risks detailed from time to time in Riverstone Networks' SEC reports, including its quarterly report on Form 10-Q for the period ended November 30, 2002 and subsequent reports on Forms 8-K and 8-K/A.
announced today the formation of a new $40 million facility for 'A' Side Directors and Officers liability insurance.
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