Which insurance provides coverage for corporate directors and officers against allegations of wrongful acts?

Directors and Officers Insurance, commonly referred to as D&O Insurance, is specifically designed to protect the personal assets of corporate directors and officers from claims that arise out of alleged wrongful acts in their capacity as company leaders. This type of insurance is crucial because it provides coverage for legal fees, settlements, and other costs associated with defending against allegations of negligence, breach of fiduciary duty, or other wrongful acts that may occur while managing a company.

The significance of D&O Insurance lies in its ability to ensure that individuals in key management positions can make decisions without the fear of personal financial loss resulting from lawsuits. This protection helps attract qualified individuals to leadership roles within companies, knowing they have a safety net in place if challenges arise related to their decisions or actions while serving the organization.

Understanding the specific focus of D&O Insurance distinguishes it from other types of coverage, such as medical malpractice or product liability insurance, which serve different purposes entirely, and errors and omissions insurance, which primarily protects professionals against claims of inadequate work or negligent actions in providing services.