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Directors and officers insurance v professional indemnity

Why You Might Need Both Professional Indemnity Insurance and Directors and Officers Insurance?

The professional landscape is rife with opportunities to be sued no matter the size of your business. Directors and officers insurance v professional indemnity, which is best to protect your business? You might think having one or the other covers all the possible claims against your business, but the differences between the two seemingly identical insurance policies is subtle. To fully protect your business and business representatives, you might need both policies.

Professional Indemnity

Professional indemnity or errors and omissions insurance protects the business against claims regarding failure to provide services. Claims might also come against the company for causing a client negative consequences financially or otherwise. Directors and officers insurance v professional indemnity is the difference between covering management decisions and any business representative including the business as a whole. Errors and omissions insurance covers claims regarding:

  • Malpractice
  • Design flaws resulting in negative consequences for tenants or clients
  • Financial damage to a client
  • Negligence

Directors and Officers

Commonly called management liability insurance, directors and officers insurance protects against decisions made by the management team. It is a personal liability insurance to protect the individuals for management malpractice claims. Covered claims include:

  • investment decisions
  • employment practice suits
  • conflicts of interest
  • negligent acts
  • release of non-public information
  • mismanagement of funds
  • unfair business practices