RAPID
SPECIALISTS
Why insure directors and officers?
In Canada, the number of claims against directors and officers is on the rise. And to protect this socio-professional category, insurers are offering them multi-risk insurance to cover their personal assets in the event of an incident.
Lawsuits can be brought against private companies or NPOs, which is why it's important to contact a broker specialized in directors' and officers' insurance.
The importance of directors' and officers' insurance
The directors or officers of a board of directorsAs a result of a specific wrong decision or unjustified dismissal of an employee, the company, organization, director or manager may be subject to legal action. In the event of misconduct, the company, organization, director or manager may be subject to legal action.
About directors' and officers' insurance cover
There are many different companies on the insurance market, offering a wide range of policies and coverage to suit all needs. Generally speaking, however, here are the cases requiring directors' and officers' insurance coverage:
- Failure by the company or organization to pay source deductions due to the government.
- Receipt of dividends when the company is in financial difficulty. This state of affairs can lead to legal action by other shareholders, who may consider that the company's financial management has been inadequate.
- Conflict between the various directors.
- Disclosure of information or lack of transparency on the part of the company
- Poor management of the structure
- Wrongful dismissal of employees. Note that some insurers may offer a special extension to cover this type of incident.
Regardless of the size of your organization, legal action can be taken at any time. Hence the need to contact a specialized insurance broker in directors' and officers' insurance. It's an opportunity to guarantee protection for the personal assets of directors and officers, in addition to those of the company.
Who needs D&O insurance?
Directors' and officers' insurance is not just for large companies. It is essential for :
- SMEs and startups : Young companies are often vulnerable to litigation.
- NPOs and charities Volunteer directors may be held liable.
- Fast-growing companies The more a company evolves, the more it is exposed to risk.
- Board of Directors Any board member may be sued personally.
How much does D&O insurance cost?
The price of D&O insurance varies according to several factors:
- Company size and sales
- Sector of activity (regulated sectors are more at risk)
- Claims history and legal background
- Amount of coverage chosen
💡 Example An SME can pay between 1,500 $ and 5,000 $ per year for coverage of 1 million $. For a large company, the premium can exceed 20,000 $ annual.
