While it’s a known fact that public companies can easily be sued or run into legal trouble, many business owners don’t realize the same can happen to private companies. D&O insurance for private companies is just as important, though. Here’s why it’s necessary to prevent problems and save businesses money.
Directors and Officers Need Protection for Their Position
Just like with a public company, directors and officers can be sued for a variety of reasons, even if a company is private.
Among these are:
A customer or other individual getting discriminated against
Lawsuits by shareholders
Knowing what can happen even with a private business makes it easy to see why his type of coverage is necessary. All it takes is one problem and a lawsuit is possible.
Understand the Risks Involved for Directors and Officers
Because directors and officers personally make many of the decisions outlined above, they can be put at extra risk for a lawsuit. Rather than the company losing money or dealing with additional problems, this can easily be avoided with the right type of insurance. The coverage can help when dealing with the publicity surrounding the case, and keep the company from dealing with further problems.
D&O insurance for private companies can protect against a variety of situations. From dealing with potential lawsuit cases to being held personally responsible, this insurance can cover many issues a private company is at risk of dealing with.