Private Company D&O Liability Insurance

What Is Private Company D&O Liability Insurance? Who is it for? Why do you need it? Why get it with First Cover? Still in doubt?

What Is
De-SPAC D&O Liability Insurance

As a director or officer of a private company, you can lose everything without the proper insurance, due to being exposed as a result of lawsuits regarding your wrongdoing. Without broad D&O insurance, owners, personally liable to reimburse the company, can end up bankrupt.

Individuals may be exposed in situations where there was an agreement by the company not to indemnify, a flexible interpretation of “good faith”, a derivative claim in a jurisdiction where indemnification is not permitted, as well as an inability or unwillingness by the company to indemnify.

Companies themselves can be exposed by shareholders and lenders, competitors, suppliers, other contracts, customers, clients, consumer groups and various third parties.

Who is it for

Private company D&O insurance is for owners, directors, and officers of private companies. Staying protected against lawsuits is not a benefit of D&O insurance solely intended for public companies alone.

Why do TARGET COMPANIES need it?

Private companies do not need to be large to be at risk of being targeted by litigious individuals. In fact, private companies of any size can fall victim to a wide range of lawsuits, from misrepresentation to employment allegations to fraud. Misunderstanding their risk exposure means many private companies do not purchase a proper D&O insurance policy, leaving their upper management personally exposed.

Broad D&O insurance protection is required because directors and officers are exposed to risk in multiple ways: first for their roles, but also again if they are owners of the companies for which they work. This means they first need a layer of indemnification covering their personal assets from the company, then another layer of indemnification to reimburse them for any personal costs they accrue during a lawsuit.