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Insurance for Directors and Officers for Public Companies

Insurance for Directors and Officers for Public Companies

Publicly-traded companies offer unique quandaries to their directors and officers. Those individuals are often responsible for making decisions that may have a negative impact on the company, and they are held directly responsible for the results of those decisions. The directors and officers for public companies are therefore legally liable for any miscalculation they might make in the course of everyday business.

One way that directors and officers for public companies can protect themselves against adverse consequences for their work is to purchase or to arrange for their company to purchase Directors and Officers Insurance. The bylaws of many publicly-traded companies provide for the purchase of such insurance as a matter of course in order to protect their directors and officers, but even so, those directors and officers should take care to ensure that the limits of that insurance are appropriate for the risks and liabilities that might be presented. If the company for which the individual works does not offer a directors and officers insurance policy as a benefit of employment, then certainly the individual should inquire with their qualified insurance agent as to the costs and benefits of such a policy. Generally, the requirements will be a business with an annual revenue of at least $500,000 and 3 or more practitioners.