Directors and Officers Liability Insurance

An increasing concern, D&O insurance provides coverage for claims and lawsuits against the directors and officers of a corporate entity for wrongful acts in their capacity as such. A “wrongful act” is any actual or alleged breach of duty, neglect, misstatement or misleading statement, or other act or omission committed by directors and officers in the discharge of their corporate duties.

Common liability exposures faced by directors and officers that are covered under a D&O liability policy are:

  • Corporate mismanagement. Employees or patients bring an action and seek to hold the directors and officers liable for financial loss due to practice mismanagement.
  • Breach of duty, of loyalty and care, or fraud. Employees allege that directors and officers are liable for financial loss due to failure to detect and prevent embezzlement or self-approval of bonuses and loans.
  • Misrepresentation of financial condition. Insurance regulators allege that the directors and officers misrepresented the financial condition of the corporation to induce new members.
  • Unfair exclusion from provider network. A physician alleges that directors and officers failed to renew his provider agreement because of his age.

Talk to one of our healthcare-business insurance experts today. We’re happy to answer any questions you have about purchasing D&O coverage for your medical practice.