Just because your an executive doesn't mean you won't be needing more insurance. This insurance has been known to save people in the past , so if you are a company with these types of positions make sure you have the proper insurance in place. D&O, or Directors and Officers liability insurance, can cover legal costs in cases of fraud or sexual harassment against one of your leaders. This D&O insurance may be good for big businesses, but combining this with EPLI(Employment Practices Liability Insurance) could be a wise move for even small to mid-size businesses. Any company which uses a board of directors should consider this kind of coverage. Small firms dealing in accounting or law may want to consider this type of insurance as well.

Employment practices suits come in a vast array of choices for those who bring them against any business. Wrongful employee dismissal cases as well as discrimination and salary cases can all come against someone involved in the higher levels of your organization. ELPI and D&O together may be the thing you need to sleep easier and have a more secure business.

Some people confuse Director's and Officers insurance as being the same as Errors and Omissions Liability insurance. Directors and Officers Liability insurance is different however, focusing on the performance and duties of management. E&O insurance has to do mainly with the companies products and services and any harm done by them. This insurance may be required at times, mostly when being funded by venture capital.

Employees, clients, even stockholders could file a claim against your company at any time. They can also file it against any of your directors and this is why D&O insurance becomes so important for these types of businesses. The people who you need to cover with these policies are not going to want to be help personally responsible for something company related, so this insurance might be needed just to keep them with the company.

More than 50 percent of D&O claims are employee related. Keeping your employees happy is always a good way to avoid lawsuits, but sometimes there are people you just can't please. At least by having your Director's and Officers insurance in place, you won't have to worry about these kinds of lawsuits. These policies are paid for by the company with no contribution expected from the employee.

Just because this insurance is in place however doesn't give any board members the right to knowingly commit wrongful acts. Certain things are covered in the D&O policy, but these types of infractions will result in the insurance not being applicable. It is important that that director or officer did not willingly do harm to any party in the lawsuit for the D&O coverage to be effective.

Some non-profit organizations may consider D&O insurance as well. Liability insurance will cover any physical claims, while all other claims could fall under D&O insurance. What the non profit company needs to figure out is if the people on their board are good enough to avoid any kind of lawsuit. Derivative lawsuits are made against the member by the organization. Direct or third party lawsuits are brought against the corporation by someone unrelated to the company. No matter what kind of lawsuit it is however, it will be a better feeling dealing with it knowing you have D&O coverage.