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How to Develop a D&O risk management strategy?

QuestionsCategory: Directors & Officers Liability InsuranceHow to Develop a D&O risk management strategy?
default avatarPlan Cover Staff asked 2 years ago
1 Answers

Best Answer

default avatarSrinivasan Mahadevan answered 2 years ago

Directors and officers liability (D&O) insurance is a critical component of almost every organisation’s risk management program. All organizations—regardless of their size, mission or structure—have some form of D&O exposure.
There are a number of strategies organizations can implement today that will protect their leadership team well into the future. For directors and officers, the first line of defense from a claim is to have a deep understanding of their responsibilities. In general, all directors and officers should be aware of the following:

  • Their specific duties and obligations
  • Their responsibility to the corporation
  • The role they fulfil on the board or in a management capacity
  • The expertise they are expected to bring to the position

Another way to develop a risk management strategy for directors is to help them understand the various sources of D&O liabilities that they can face. The following are strategies companies can use to build a strong risk management practice for directors and officers: 

  1. Provide regular training on roles, responsibilities and liabilities they face.
  2. Establish and implement policies and procedures for directors to follow 
  3. Establish a formal and a strong reporting mechanism for directors to receive information
  4. Document all decisions and processes
  5. Help directors in their decision making and having a strong legal counsel and support