What type of policy is designed for directors and officers of corporations?

Directors and officers liability insurance is specifically designed to protect the personal assets of individuals serving as directors and officers within a corporation. This type of policy provides coverage for legal expenses, settlements, and other costs that may arise from lawsuits or claims related to their decisions during the course of their duties. Such claims may involve allegations of wrongful acts, such as mismanagement, breach of fiduciary duty, or other errors in judgment that could potentially harm the organization or its stakeholders.

This insurance is critical since directors and officers often face legal risks stemming from their roles, and without proper coverage, they could be financially vulnerable. The distinction of this insurance lies in its focus on the personal liability of the individuals, separating it from other types of policies that may cover broader entity-related risks or professional errors not specifically tied to corporate governance roles.