No matter your business’s size, industry, and standard practices, it’s always important to make sure that you have insurance coverage for every possible exposure and then some. When it comes to protecting your business from claims of malpractice or improperly performed services, you might think that an Errors & Omissions policy is the best one. However, this policy doesn’t cover all of the possible claims you might face, making a Directors & Officers policy necessary to fill in the gaps. On the surface, these two policies sound identical: they protect your business from claims of wrongful acts.
Directors & officers insurance, also referred to as management liability insurance, is a policy that protects the executive management team of a business from allegations against their management decisions. Note that this policy solely applies to the business’s decision makers, and protects them from personal liability in the event of claims about their management practices.
Claims that would be covered by D&O insurance include:
Errors & omissions insurance, also referred to as professional liability insurance, is designed to protect your business against allegations that you have failed to provide professional services, or provided them in a way that has caused financial damage or other negative consequences to a client. D&O mainly covers decisions made by management, but E&O is generally applicable to individuals who provide goods and services directly to clients.
Claims that would be covered by E&O insurance include:
