Many people are aware of the numerous lawsuits filed against large, public companies. This is because the stories of action taken by stakeholders are often featured in the news or on television. However, there are many mid-sized and small scale companies who also experience such lawsuits. Stakeholders in a company will often more to litigation for the purpose of counter acting alleged wrongdoing on the part of business executives such as, misappropriation of funds, financial negligence, and inappropriate financial management. According to the experts at NERA Economic Consulting, there are upwards of 300 lawsuits filed each year against publicly traded companies and enterprises. It is often forgotten that those who are at risk for such legal action do not only include companies that are publicly traded. Small businesses are also often affected by lawsuits filed against them by ill wishing family members, investors, and other associates. It is important for many businesses to have d&o insurance in order to counteract such measures.
D&o Insurance Purposes
d&o insurance is usually implemented to protect the people who run a certain company, business, or organization from financial loss due to legal action taken against them. It protects a person’s business, as well as their directors and officers from claims pertaining to the respective duties of business executives. Other insurance policies are often used in conjunction with directors and officers insurance.