Choice Insurance Agency
Directors and Officers Insurance in Massachusetts
Offering customized insurance solutions in Massachusetts and beyond.
What is directors and officers insurance?
Those in senior leadership positions assume significant responsibility, and some corresponding risks. Should an action or decision negatively affect an organization in a big way, the leaders who took that action could be held individually accountable. That’s why senior leaders of businesses and nonprofits in Massachusetts should consider directors and officers insurance.
Directors and officers insurance is a type of liability coverage designed for those in senior leadership positions. Coverage could provide valuable protection if an action has negative consequences.
Which senior leaders of Massachusetts organizations is D&O insurance for?
Anyone holding a senior leadership position might benefit from the protections that D&O insurance affords. This includes leaders of both businesses and nonprofits that are in Massachusetts. For example, those holding the following positions may want coverage:
- C-level executives and presidents
- Vice presidents and directors
- Chairpersons and members of boards
- Trustees, treasurers, and fiduciaries
- Advisory partners
Without coverage, these leaders might be held individually responsible for their actions if serious negative consequences follow. Such situations can lead to expensive lawsuits, as defense costs and a settlement can add up.
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Moved all my personal lines of insurance over to Choice. They found me a set of policies that saved me over $1000/year. Then, Julie took care of my commercial line, jumped through so many hoops and got me a policy for my business at an amazing rate.
Great people, great insurance, great advice, great price.
Choice insurance has been providing insurance coverage to our commercial real estate business for over 7 years and the service has been tremendous. Peter has always responded quickly and with incredibly aggressive pricing; and with a perspective to assure that we are fully covered for all potential issues without unnecessary coverage and fees. There is such a comfort when working with Peter and his company that our best interest is their top priority.
I have been a happy customer of Choice Insurance for 12+ years. Peter and the team have been fantastic — always professional and knowledgeable about supporting my business insurance needs as well as our personal, home, car, and condo insurance needs. Peter has helped us with insurance questions related to buying and selling homes, a flood insurance claim, a tree that almost fell on our house and destroyed our fence, and a car accident. Recently, Peter noticed that our condo insurance (inherited from the prior owner) was severely inadequate. He helped us switch to a much better policy within less than a day. And, thank goodness he did. A couple weeks later, I smelled gas outside our home. It was a gas leak that National Grid fixed right away. But, I slept more soundly that night knowing that if the worst had happened, we would be fully covered thanks to Peter! I can’t recommend Choice enough!
This is our third policy with Peter, he’s awesome!! We started with a policy for a commercial space and added a home insurance and auto policy because of the quality of service that we received.
We highly recommend Choice Insurance Agency for competitive pricing and transparency. Want a great policy and customer service experience look no further.
Peter and his team are thorough and have a strong sense of urgency for all matters pertaining to our account. Each time we reach out for assistance, our expectations are exceeded. I would recommend his team to anyone.
I switched to Choice 10 years ago and with 2 teenage drivers we interact frequently. Every time they have made the process quick and effortless. My family and I could not be more pleased.
What sorts of actions and decisions is D&O insurance able to cover?
D&O insurance might cover a broad range of actions and decisions that senior leaders could take. Depending on a policy’s terms, items like the following may be covered:
- Misrepresentation
- Misleading statement
- Fund misappropriation
- Decision leading to bankruptcy
- Regulatory violation
- Legal violation
- Poor corporate governance
These protections generally don’t apply when an action is criminal and/or intentional. They also generally don’t protect against simply bad business decisions, as it’s a leader’s responsibility to know the business landscape. For honest errors that have serious negative consequences, however, the protections offered can be quite valuable.
An insurance agent who specializes in D&O insurance can check what exactly a particular policy would likely cover. They’ll also be familiar with the risks that senior leaders are exposed to, and can accordingly recommend coverages.
Will D&O policies cover breaches of fiduciary responsibilities?
Exactly what any policy will cover depends on the policy’s terms, and protections certainly can vary. There usually are policies that extend protection to fiduciary breaches, however. A knowledgeable agent can check which policies provide such protection.
What are directors and officers Side A, Side B, and Side C policies?
A few different types of directors and officers policies are available. What risks and parties they cover are commonly referred to as “sides.” There are three main ones:
- Side A normally offers senior leaders, themselves, protections against covered lawsuits. This side may apply when a business or nonprofit doesn’t have sufficient funds to cover an individual lawsuit, which is a risk if the organization becomes insolvent or has insufficient financial reserves.
- Side B normally covers businesses and nonprofits against covered lawsuits. This side may protect the organization if it’s sued because of a senior leader’s actions.
- Side C is normally used by public companies that need coverage for securities-related risks. It might occasionally be needed by private businesses.
What expenses D&O coverage pay when there’s a claim?
In the event of a covered lawsuit or claim, D&O coverage usually covers most expenses that are directly associated with the suit. These can include attorney fees, court costs, settlements, and judgments. Payment is typically subject to a deductible and limit, along with any other applicable conditions.
How is D&O coverage handled during mergers?
It’s often particularly important to maintain D&O coverage for all senior leaders who are involved in a merger. Such a major event may carry an increased risk of lawsuits.
Maintaining coverage during mergers is a complex situation. In most cases, leaders of both businesses should have coverage throughout the process. This is something that leaders should seek the guidance of an experienced and highly knowledgeable insurance agent who specializes in D&O.
How can Massachusetts organizations get directors and officers insurance?
If you need help finding directors and officers insurance, reach out to the independent insurance agents at Choice Insurance. We’ve worked with many Massachusetts businesses and nonprofits, and we’ll make sure you find the coverage that your organization, its leaders, and you personally need. s.
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