For business owners, CXO’s, and corporate executives, the opportunity to face litigation increases each year due to the litigious world we live in.
Corporate accountability applies to both private business as well as publicly owned companies, for profit and not-for-profit. This accountability makes management decisions evermore relevant and in need of protection of corporate and personal assets.
Directors and Officers Liability (D&O) serves to protect those risks not included under a general liability policy. Known as a “wrongful act” the D&O policy applies its coverage to either an actual or alleged mistake.
A key to D&O insurance is the coverage to provide legal defense against any such claim. The cost of legal defense is skyrocketing, surpassing most judgements. It is here that the most emphasis be placed on considering this insurance.
For government contractors, in addition to facing a multitude of business decisions that will take your company in any direction, the False Claims Act (FCA) should be front and center. Inappropriate rate or cost charges could jeopardize both the standing of the contract and the business itself. Again, whether real or imagined, D&O insurance will provide legal defense.
D&O may be used if a subcontractor is removed from a contract and files a lawsuit for breach of contract. Placing your team in a position to work on this claim would be a terrible use of their time, money, and resources. The litigation aspect would be covered allowing your team to work on what is necessary.
