Directors And Officers Flashcards, test questions and answers

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What is Directors And Officers?

Directors and Officers Liability (D) is a type of professional liability insurance that protects the personal assets of corporate executives in the event they are sued for decisions they make while performing their official duties. It is designed to cover legal expenses, judgments, settlements and other related costs. D insurance typically provides protection for directors, officers and employees from personal financial loss due to wrongful acts or mistakes made in their capacity as corporate representatives.The purpose of D insurance is to protect directors and officers from financial loss arising out of alleged wrongful acts or omissions related to their management roles within a company. It covers legal costs associated with defending claims such as breach of duty, mismanagement, negligence or discrimination. In addition, it can provide protection for judgments or settlements resulting from lawsuits brought against them by shareholders, creditors or other third parties. D liability coverage may also include reimbursement for any damages resulting from investigations by regulators including the SEC and other government agencies such as the Department of Justice. This type of coverage is especially important if a director or officer makes decisions that violate securities laws; without this protection they could face significant fines and penalties if found liable. In recent years there has been an increased focus on corporate governance and accountability at many companies; because of this it has become more common for businesses to purchase D insurance as part of their risk management strategy. Many large corporations now require all board members and executives to carry this policy in order to protect both themselves personally as well as the company’s assets in case an individual is sued over decisions made while acting on behalf of the corporation.