Directors and Officers Insurance in Maine
Allen/Freeman/McDonnell Agency
Directors and Officers Insurance
- What Is It?
- Who Needs It?
- Coverages Offered
Directors and officers insurance offers specialized liability coverage for leaders. In the event that a leader is sued, the insurance may cover attorney fees, court fees and any resulting settlement.
Leaders who are unsure whether D&O coverage is appropriate for their role should discuss the coverage in more detail with a knowledgeable insurance agent. An agent who specializes in D&O can explain how coverages may or may not apply in different situations.
- Conflicts of interest (apparent or real)
- Bad investment decisions
- Inappropriate personnel decisions
What is directors and officers insurance?
Organizational leaders accept significant responsibility, and with that responsibility comes risk. They may be held personally liable for decisions that adversely affect their organization. Directors and officers insurance helps protect leaders of Maine organizations from the inherent risks that come with their positions.
Directors and officers insurance offers specialized liability coverage for leaders. In the event that a leader is sued, the insurance may cover attorney fees, court fees and any resulting settlement.
Who in Maine is D&O insurance appropriate for?
Most Maine professionals who hold leadership positions ought to consider D&O insurance. This includes leaders of both nonprofit organizations and for-profit businesses.
For instance, the following professionals could likely benefit from the protections that D&O coverage affords:
- C-level executives
- Presidents and vice presidents
- Chairpersons and board members
- Directors and officers
Leaders who are unsure whether D&O coverage is appropriate for their role should discuss the coverage in more detail with a knowledgeable insurance agent. An agent who specializes in D&O can explain how coverages may or may not apply in different situations.
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Should volunteers who hold positions with nonprofit organizations have D&O insurance?
Even volunteer leaders of nonprofit organizations might be sued over their decisions, and this can happen regardless of how large or small a nonprofit’s budget is. Thus, presidents, vice presidents, chairpersons, board members, directors and officers of nonprofits often should consider D&O insurance.
What types of incidents do D&O policies extend coverage to?
D&O policies might cover the following sorts of incidents:
- Conflicts of interest (apparent or real)
- Bad investment decisions
- Inappropriate personnel decisions
- Improper releases of confidential information
- Gross negligence actions
- Unlawful actions
- Other actions as directed by a policy’s terms
In most cases, simply bad business decisions aren’t covered by this insurance. Leaders are generally responsible for adapting to market shifts and other business changes on their own.
Do D&O policies cover charges brought by regulators?
Many D&O policies have historically excluded charges brought by regulators, which can include government agencies, quasi-government agencies and self-regulating agencies. Insurers have begun to shift toward including coverage for regulators’ charges within their D&O policies, though.
Leaders who are concerned about the specific risk that regulators’ charges present should seek assistance from an insurance agent who knows these policies well. Not all policies provide coverage for the charges, but some robust policies that do may be available.
Do leaders pay for their own D&O policies?
While leaders usually have the option to purchase D&O coverage on their own, policies are more often paid for by the organizations that they lead. Since the risks that D&O protects against stem largely from the positions that leaders hold within organizations, it’s customary for organizations to cover the cost of insuring against those risks.
Organizations usually procure coverage for all of their leaders through a single D&O policy. A knowledgeable agent can assist with finding a suitable policy that covers all leaders who need protection.
How much are premiums for D&O policies?
The premiums charged for D&O policies vary, as the specific risk profiles of different leadership positions vary. Premiums tend to be affordable in light of how much lawsuits can cost, however.
For help comparing different policies’ premiums, organizations can talk with an independent insurance agent. Independent agents are able to compare policies from different insurance companies, which makes assessing both rates and coverages easy.
How can leaders of Maine organizations get directors and officers insurance?
For assistance with finding directors and officers insurance in Maine, contact the independent insurance agents of Allen/Freeman/McDonnell Agency. Our team has worked with many organizations throughout the state, and we have the expertise to make sure you or your organization’s leaders are well protected.
