Covering Yourself: Does your D&O insurance provide protection for the individual or for the company?

Author: Mary E. McCutcheon

December 01, 2005

Directors and Officers (D&O) Liability insurance originally was designed as a tool to protect the personal assets of the directors and officers involved in high-stakes litigation arising out of activities conducted on behalf of the company.  Its secondary purpose was to guarantee the corporation's indemnification obligations to those individuals.  But as companies became more concerned about the potentially catastrophic costs of defense and settlement of shareholder litigation, they began to rely on D&O insurance as a mechanism to protect the corporate balance sheet as well.  Competing claims on the policy proceeds create tensions not only when claims arise under the policy, but also when the D&O program is placed.

Document: Covering Yourself - PDF