What is Directors and Officers Insurance?

Directors and Officers insurance is a special type of insurance protection payable to the directors and officers of a company to cover damages or defense costs in cases if they are prosecuted or sued for their wrongful acts while serving that particular company.

Also known as D&O insurance, this type of insurance can be taken against typical sources of claims including shareholders, shareholder-derivative actions, customers, regulators, and competitors (for anti-trust or unfair trade practice allegations).

Usually D&O insurance is taken by the company itself but in some cases people personally seek this protection.

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