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Adam Furmansky, Nick Reider
Aon and the National Association of Corporate Directors (NACD) developed Director Essentials - Directors & Officers Liability Insurance to guide directors on how Directors and Officers (D&O) Liability Insurance can effectively mitigate risks associated with their roles.
As directors and officers face increasing liability risks, including regulatory enforcement actions, shareholder lawsuits and other claims, D&O insurance serves as a crucial risk management tool. Directors and officers face a wide array of potential liabilities tied to fiduciary duties, disclosure obligations, and evolving challenges like cybersecurity and AI. It offers protection against personal financial loss from company-related lawsuits and claims, limiting business leaders’ personal exposure to significant liabilities.
The report outlines the sources of D&O liability, the basics of D&O insurance, and the common types of claims directors and officers might face. It breaks down key duties that give rise to D&O risk, how D&O policies are structured, common exclusions and claims (including stock drops, M&A, and derivative suits), and the different D&O landscapes facing public, private, and nonprofit boards.
Emphasizing the importance of understanding the structure and function of D&O insurance, the report aids directors in navigating today's complex risk environment. Global operations and emerging technologies demand fresh scrutiny of D&O coverage. Additional lines of insurance, such as employment practices liability, fiduciary liability, crime, kidnap and ransom, and cyber liability, are also addressed.
The report serves as a valuable resource for directors, offering essential questions to consider when evaluating their company’s insurance program for adequate protection and alignment with industry trends and insurer partners.
Read the full report: Director Essentials: Directors & Officers Liability Insurance
About Aon
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