Directors and officers are bound by duty towards various stake holders. Any breach or non-performance in the duties can result in claims against them by reason of any wrongful act, actual or alleged, in their respective capacities.
Directors and Officers (D&O) Insurance provides for financial protection in the event of a claim alleging a wrongful act in a managerial or supervisory role of the director, or an officer in the organisation.
Companies of all sizes need to purchase a D&O liability insurance.
Startups are sometimes vulnerable, agile and less risk-averse than other companies. The directors in a Startup often make decisions quickly to get to the market, capture the value and hence might not have the time to evaluate all potential risks. Therefore the probability for a D&O claim is naturally high for startups.
Even if a Startup is securing funding to get business going, investors will request for the Startup to have D&O insurance because they are looking to place someone on the board who becomes party to majority of crucial decisions the Startups take. Having a D&O liability insurance will ensure that these individuals’ personal assets will be protected against claims while they are acting in their capacity as a director on the board of the Startup.
PlanCover has been providing guidance and support for Startups in all domains. Once your Startup is operational, have a business model working, started acquiring customers and getting interests from investors the next step is to contact PlanCover to help in structuring suitable, affordable and best insurance for your business.
Please login or Register to submit your answer