Liability insurance for directors and officers has typically been viewed as a routine thing, in the past. It’s just one of tasks things that needs to be done, and many people give it little thought. However, it is important to understand what the implications of this “box ticking” activity really are.
Here are some of the most important aspects of these insurance policies, as well as the potential problems that might be encountered. These pitfalls should be carefully noted or get some expert advice from lawyers, to avoid falling to them.
Different policies will typically vary, regarding what will trigger a notification. That means directors and officers will not always be notified by the same events, depending on their company and the policy it holds. If an insurer is notified, it is important to be aware that proceeding events might not actually be covered. This will, of course, run the risk of exposing directors and officers to potential claims, even though they believed they were covered.