Directors and Officers Insurance in Vermont
What is Directors and Officers Insurance?
Leaders of businesses and nonprofits have a great deal of power, and with that power comes responsibility. Because leaders have more influence than lower-level employees, they’re sometimes held to higher standards. Should leaders make a poor decision or take a wrong action, they may be personally held responsible for the consequences of the decision or action. Directors and officers insurance helps protect leaders of businesses and nonprofits in Vermont from the risks that they assume when they lead organizations.
Directors and officers insurance is a form of professional liability insurance that’s specifically designed for people who lead businesses, nonprofits, and other organizations. Policies provide insurance against a variety of risks that are unique to leadership positions. For example, a typical policy might provide coverage for:
- Poor investment decisions
- Releases of confidential information
- Problems related to hiring and firing decisions
- Gross negligence
- Conflicts of interest
- Unlawful acts
- Other errors that a leader may make
(Exact coverages vary from policy to policy).
Having a policy that includes coverage for gross negligence, conflicts of interest, and unlawful acts isn’t a license to be negligent, have conflicts of interest, or act illegally. A policy may provide financial assistance if a leader is found guilty of one of these things, but financial consequences are sometimes only one type of consequence that leaders may face.
Who Needs Directors and Officers Liability Insurance?
Almost anyone who leads a business, nonprofit, or similar organization should consider getting directors and officers liability insurance, regardless of where in Vermont their organization is or how large (or small) it is. A CEO of a large company in Burlington, VT might need this type of insurance, as may the board members of a small nonprofit in Saint Albans, VT.
The list of leaders who might benefit from the protections that a directors and officers policy provides include:
- C-level executives of businesses (i.e. CEOs, CFOs, CIOs, CTOs, CCOs, and CSOs)
- Presidents and vice presidents of companies
- Presidents and board members of nonprofit organizations
- Other high-ranking officers whose decisions have large impacts
In many cases, businesses and nonprofits will purchase policies for their leaders, since the risks these policies protect against come from work the leaders are doing for the business or organization.
How Can Organizations in Vermont Get Directors and Officers Liability Insurance?
The easiest way to shop for directors and officers insurance is through an independent insurance agent who is licensed in Vermont and familiar with this type of insurance. An agent will be able to review the roles of a business or nonprofit’s leaders and determine what coverages they need. An independent agent can then compare all of the directors and officers liability insurance policies that are available for the one that best meets the needs of the business or nonprofit’s leaders.