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Directors & Officers Insurance (D&O)

 

Ever heard of Directors & Officers
Insurance (D&O) before? 

Unfortunately, many insurance agents who do not specialize in working with IT companies lack the expertise to fully understand how D&O can affect your business.

D&O Insurance is purchased by an IT organization to provide financial protection for the directors and officers in the event they are sued in conjunction with the performance of their duties as they relate to the company. Think of D&O as a management Errors and Omissions policy.

Being private does not mean that the decisions of your board are immune from public scrutiny.  Shareholders, employees, customers, suppliers, competitors and even the government may bring an action against your private company and its board. A corporate shield and broad by-laws offer board members and employees some protection. Unfortunately, in many cases, it is not adequate.

Typical lawsuits against directors and officers include allegations of:

  • Mismanagement of operations or company assets
  • Self-dealing and conflicts of interest
  • Misrepresentation during the sale of company assets
  • Misrepresentation in a private placement prospectus
  • Acts beyond authority granted in by-laws
  • Violation of certain state and federal laws
  • Breach of fiduciary duties
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Operated by McCormick & Reinmuth Insurance Agency Inc.