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Tips for Selecting Director's Liability Insurance

Tips for Selecting Director’s Liability Insurance

No matter what business you’re in, your organization needs to protect itself with director’s liability insurance. Also known as E&O, or errors and omissions insurance, it acts like a malpractice insurance. If you are new to E&O insurance, you may not know what to ask. Here are some things to keep in mind when purchasing this type of coverage.

  1. What kind of prior-acts coverage does the policy cover? Some policies only cover acts made during the policy coverage, while others are on a claims-made basis.
  2. Make sure to understand the limitations of a polity. Work with your agent to minimize the risks and keep your premiums low.
  3. Does the agent understand your industry? The agent can assist your organization in risk management and making sure you have the right coverage, but only when they know your industry.
  4. Does the policy cover all of your services?

Director’s liability insurance protects the future of your business or organization by providing legal costs when a director is accused of a wrong-doing. Even if they are completely innocent, defending their innocence is expensive. Make E&O insurance part of your cost of doing business to ensure the profitability of your business, no matter what happens. Lawsuits happen in today’s society. E&O insurance helps you manage the costs of a lawsuit.