Directors & officers insurance policies can be tailored considerably to meet the needs of each organization or company. Still, many policyholders miss out on the benefits of incorporating complementary policies into directors & officers liability coverage to offer even better protection. To minimize risk, D&O policyholders should consider adding the following two areas of coverage at the next opportunity.
Employment Practices Liability
Some of the decisions or actions of directors and officers may result in employment practices claims. An employee may make a claim for harassment, discrimination, wrongful discharge, and more. Since most companies with more than a few employees need this form of coverage anyway, bundling it with directors & officers liability coverage is a smart way to reduce costs.
Fiduciary liability coverage is another insurance product that can be effectively added to a directors & officers policy. This type of insurance protects fiduciaries against claims that they have mishandled resources such as employee benefits, pensions, and health plans. If the actions of directors and officers ever result in significant financial loss that affects employee benefit plans, this insurance can help protect against any resulting claims.
Striking the Right Balance
Adding these two provisions to a D&O policy can help lower insurance costs. However, policyholders should remember that doing so will reduce the coverage left for pure D&O claims after an employment practices or fiduciary liability claim is made. This is one reason that policyholders should always work with an experienced insurance agent to evaluate coverage needs and available policy options.