Directors and officers liability insurance is coverage for managers of companies that protect them from claims resulting from their decisions and actions taken while performing duties for the company. These policies cover directors and officers as individuals as well as the company if it has to pay a claim on behalf of its managers. Many companies choose to invest in Axis Management Liability Coverage as part of a risk management plan. Any company as the potential for D&O exposure but publicly traded companies are especially at risk.
Common Risk Scenarios
Different markets come with different risks. The most frequent claims are related to employment of Human Resources issues. These may include sexual harassment, discrimination or wrongful termination. Other common risk scenarios include:
- failure to comply with regulations or laws,
- shareholder actions,
- inaccurate or inadequate disclosure,
- decisions exceeding the authority of the manager or
- reporting errors
Who Can Make a Claim?
Who can make a claim may vary depending on the country and on local laws. In the United States, many claims are made by former employees against a company. This is due to the nature of claims. In the U.S. around 40 percent of claims are made over employment practices. Some of the largest claims, though, are made by shareholders and regulators. Axis Management Liability Coverage may be able to add protection against any of these claims.