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Small Business Directors and Officers Insurance Insight  |  Coverage Can Extend To A ‘Wrongful Act’

If you lead a small business, you are likely aware that property damage and bodily injury are the mainstays of commercial general liability – otherwise known as CGL insurance. However, you may not be aware that unlike CGL, directors and officers insurance is designed to specifically address what’s known as a “wrongful act” an actual or alleged error, omission, misleading statement, neglect or breach of duty. This is an important distinction if you are renewing or reviewing your small business insurance package.

A Single Board Vote Can Put Your Small Business At Risk
Because personal credibility, regulatory and directional changes make headlines and generate social media buzz, each and every decision your directors and officers make may be judged by a very public microscope. The success of any small business is tied to transparency and accountability. Should a worst-case situation arise, your small business could find itself facing the uncharted waters of a lengthy litigation as a direct result of decisions made by your board.

[Did you know?] A small to mid-size privately held company &/or non-profit may not have the financial resources to fund the indemnity provisions, making the bylaws hollow. Typically, indemnification provisions are part of a corporation’s charter and/or bylaws. In the event of a covered loss, an ALIGNED small business directors and officers insurance policy can provide an extra layer of security.

The legal cost to defend individual directors and officers is substantial, as are the potential penalties that can impact their personal assets.
Your small business directors and officers insurance policy may include:

  • Coverage for past, present and future directors and officers of the small business
  • Defense costs and indemnity coverage to the entity listed on the policy declarations
  • Reimbursement to the small business for a contractual obligation to indemnify directors and officers who serve on the board

Providing the best risk protection is an important recruitment and retention tool. Because your directors’ and officers’ personal liability risks are not covered under ANY personal insurance policy — small business directors and officers insurance is an important cornerstone of your  risk management strategy.

ALIGNED Small Business Directors and Officers Insurance  |  1-866-287-0448
Across Canada, our small business insurance brokers can help ensure you have the best small business insurance, including directors and officers coverage. Talk to us about the best D&O insurance solutions. Uniquely within the industry, we create, negotiate and deliver the best business insurance and risk management strategies/solutions to Canadian small business. We can help you get quotes for small business insurance and directors and officers coverage today.  100% Canadian owned, we serve more than 1,400 clients across the country through offices in Toronto, Calgary and Vancouver and a national operations centre in Waterloo, Ontario.

SourceIRMI

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