People who have leadership positions in organizations are entrusted with significant responsibility. With that responsibility comes certain risks. Directors and officers insurance protects leaders of organizations in Massachusetts from some of these risks.
Directors and officers insurance is a form of professional liability coverage that’s specifically designed for people in leadership positions. As is the case with other forms of professional liability coverage, most directors and officers policies will cover legal fees, judgements and settlements arising from covered claims.
Most people who lead an organization should at least consider the protections that D&O insurance offers. This includes leaders of businesses and nonprofit organizations regardless of size. Some specific examples of leaders who might benefit from this form of coverage include:
While Massachusetts has some state laws that may shield board members serving in a volunteer capacity from certain liabilities, these laws are complex and have to be applied to each particular situation. They may not offer protection in all cases, and lawsuits may be filed even when laws to apply.
Having D&O insurance in place offers volunteer leaders another level of protection, as an insurance policy will likely cover situations not addressed by state law and normally pays legal fees should a covered lawsuit be filed.
For help navigating legal and insurance issues, anyone who’s volunteering in a leadership role should speak with an attorney and informed insurance agent about the specifics of their volunteer situation. An experienced attorney will be able to provide wise advice, and an agent who specializes in D&O insurance will know the best way to procure whatever insurance coverages are needed. Together, their expertise will guide leaders toward the right combination of protections given their situation.
Leaders may choose to purchase their own directors and officers coverage, or they may ask their organization to furnish a policy. Having an organization pay for a policy isn’t an unreasonable (or uncommon) request, for the risks that these policies protect against are directly related to the work leaders do for their organizations.
Regardless of who ultimately pays for a policy, most directors and officers policies are affordable. Rates are based on multiple factors and can vary, but they’re usually adaptable to an individual or organization's budget.
Of course, individuals and organizations will find the most affordable policies by comparing options from different insurance companies with an independent insurance agent. An independent agent is able to request quotes from several insurers, making it easy to see coverage and premium differences between the offerings available.
Most directors and officers policies are written for year-long terms, but there are occasional exceptions to this general rule. Leaders who need coverage for more than one year can usually renew their policy when it expires or purchase an altogether different one at that time. Those who need coverage for less than a year can talk with a specialized agent about their coverage options. A policy can probably be adapted to offer coverage for less than 12 months..
If you or someone in your organization needs directors and officers insurance, contact the independent and experienced insurance agents at Dempsey Insurance. Our agents have helped many leaders in Massachusetts find the coverage they need, and we’d be happy to assist you and/or your organization.