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D&O保険（Directors and Officers Liability Insurance）現役損保マンのブログ from www.sompo-info.com

Introduction

Directors and officers (D&Os) are responsible for managing a company's operations and making important decisions. However, their decisions can sometimes lead to legal disputes and lawsuits. This is where D&O insurance comes in handy. In this article, we'll provide you with everything you need to know about D&O insurance.

What is D&O Insurance?

D&O insurance is a type of liability insurance that protects directors and officers from personal liability arising from their decisions and actions while managing a company. The policy covers legal fees, settlements, and judgments that may arise from claims against them. It also provides protection to the company itself for reimbursement of losses incurred as a result of the D&O’s actions.

Who Needs D&O Insurance?

Any company that has a board of directors or officers should consider D&O insurance. This includes private companies, non-profit organizations, and public companies. Even if a company has good corporate governance and operates ethically, it can still face legal action from shareholders, employees, customers, or regulators.

What Does D&O Insurance Cover?

D&O insurance covers a wide range of legal claims against directors and officers, including:

breach of fiduciary duty
negligence
mismanagement
conflict of interest
breach of contract
violations of laws or regulations

The policy typically covers defense costs, settlements, and judgments. However, it may have exclusions and limitations, so it's important to review the policy carefully.

Benefits of D&O Insurance

Having D&O insurance can provide several benefits:

Protects personal assets of directors and officers
Attracts and retains qualified directors and officers
Provides peace of mind to directors and officers
Protects the company's reputation and financial stability

How to Choose D&O Insurance

When choosing D&O insurance, consider the following:

The extent of coverage needed
The size and type of the company
The company's risk exposure
The insurer's financial strength and reputation
The policy's exclusions and limitations

Conclusion

D&O insurance is an important protection for directors, officers, and companies. It can provide financial security and peace of mind in the face of legal disputes and lawsuits. By understanding the basics of D&O insurance, you can make informed decisions that benefit your business and its stakeholders.