Directors Officers Liability

Directors & Officers (D&O) Liability Insurance

Since 1997, the AMC Institute has established a tailored insurance program to address the unique needs of its Association Management Companies and the associations they serve. Over time, the scope of AMC’s services and practices has expanded significantly. AMBA is here to help AMC’s navigate the insurance landscape through expert consultation.

Directors and Officers (D&O) Liability Insurance provides coverage for individuals who hold director or officer positions within a business or organization. It safeguards them from personal financial losses in case they face lawsuits related to their roles. Additionally, D&O insurance can cover legal fees and other costs incurred by the organization due to such legal actions.

A Director & Officers insurance policy covers the following:

Individual Coverage:

• Traditional coverage for claims made against individual directors, officers, and the board.

Corporate Reimbursement:

• Used to fund the indemnification of individual directors and officers as outlined in the corporate charter or by-laws.
• Operates on the principle that the organization’s by-laws must first indemnify the directors and officers.
• The insurance policy then reimburses the corporation after the deductible is paid and within the policy limits.

Entity Coverage:

• Applies to claims made against the corporation itself.
• A significant drop in stock value can lead to a class action lawsuit against the directors, officers, the entire board, and the association.
• The rise of electronic trading has increased the frequency of such claims.

AMBA’s D&O Liability Insurance:

• Provides protection for all three types of exposures mentioned above.
• Essential for protecting the personal assets of directors and officers, as well as the financial well-being of the association itself.
• Covers claims arising from decisions and actions taken within their regular duties.