“Community banks having tough time filling boards – Personal
liability risks scaring away candidates” says a headline on the front page of
today’s issue of NJBIZ (njbiz.com), February 9, 2015.
Personal liability risk is a serious
concern, not only for community banks, but for any business or non-profit with
a Board of Directors. It should also be of concern to anyone serving on a Board,
or considering doing so.
Fortunately, there is a solution: it’s called Management
Liability (or Directors and Officers Liability) Insurance.
A directors and officers liability
policy (D&O) can provide insurance for negligent acts, omissions or
misleading statements committed, or allegedly committed, by directors and officers of a company that
result in lawsuits being filed against the company. D&O coverage can be
purchased to reimburse the company when it indemnifies directors or officers,
to specifically cover directors or officers when the company doesn't indemnify
them or to provide entity coverage to cover claims made specifically against
the company.
Public and private
U.S. companies, as well as non-profit organizations, can apply for coverage. Punitive
and multiple damages may be covered where insurable by law. Legal costs are
generally paid in addition to policy limits. A policy may respond to suits
naming only the company and may include coverage for past, present and future
executives.
So if you serve on a
Board in NJ, or you are considering joining a board, contact us today to discuss D&O.
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