Directors & Officers

Not only do public companies have this exposure, but private companies also face similar risks, and the size of the organization does not matter.
Any private company can be sued by employees, shareholders, investors, customers, competitors, creditors, vendors, and/or suppliers.
According to Tillinghast-Towers Perrin D&O surveys:
- Claimant distribution against private companies included 33% employees, 28% other third parties, 25% shareholders, and 10% competitors.1
- Defense costs can be significant, with a median amount of over $44,000 (and an average of more than $800,000).2
- Private company D&O claim frequency and susceptibility have been relatively stable over time, but remain higher than they were in 2004.3
The costs mentioned above would be difficult for many private companies to sustain. And, in some cases, without the proper D&O insurance, individual Directors and Officers could have to pay for those defense costs out of their own personal assets.

Side A Coverage for Directors and Officers for non-indemnifiable loss resulting from a claim for a wrongful act.
Side B Coverage reimburses the entity for indemnifiable loss resulting from a claim against Directors and Officers for a wrongful act.
Side C Coverage helps protect the entity.

Failure to perform appropriate due diligence when making an acquisition.
Breach of duties under applicable securities or other statutory laws.
Careless management strategy that causes bankruptcy.
Misstatements or omissions regarding potential future performance of the company to minority investors.
Misrepresentations or errors regarding the financial health of the organization to a customer, vendor, or creditor.
Conflicts of interest when considering personal motives vs. interests of the shareholders.
Competitor lawsuits for tortious interference with business relationships.

Lawsuits have been filed against private companies operating in many different industries including but not limited to: