Here’s how you can benefit from D&O insurance for manufacturers.
With today’s emphasis on corporate transparency and accountability, a manufacturing company’s directors and officers face countless numbers of exposures. Regardless of your company’s size, the legal costs associated with a lawsuit can be crippling for both the business and your directors and officers.
Many wrongly assume that directors and officers (D&O) insurance is only necessary for a publicly traded companies. However, privately held organizations can just as easily fall victim to lawsuits that can impact the company, its officers and board, making D&O insurance a must. Specifically, D&O insurance can provide the following benefits to privately held companies:
- Legal cost reimbursement. In the event of a claim D&O policies can provide legal cost coverage for a variety of claims. Specifically, D&O insurance can provide reimbursement to leaders of private companies following allegations of wrongful acts, financial mismanagement, errors in judgment and negligence. Because D&O lawsuits can occur without warning and easily reach six figures, it’s critical that private manufacturing company leaders arm themselves with the right policy.
- Peace of mind. D&O claims can come from a variety of sources, including your employees, clients, contractors, and government bodies. For private companies, claims from creditors and competitors are particularly common. D&O insurance ensures that private manufacturing leaders are protected regardless of where claims originate, providing timely and effective coverage.
- An improved ability to attract new directors. Simply put, having a strong D&O policy in place makes board seats more attractive. This is because purchasing insurance shows prospective leaders that you take D&O risks seriously and are prepared to protect them in the event of a claim.
- Coverage for regulatory exposures. Regulatory agencies are increasing their scrutiny of private companies, making D&O insurance all the more important. Paying the cost of an attorney to defend a director or officer against a government enforcement action is expensive, and private company D&O insurance policies can help with these types of expenses.
Want to learn more about D&O insurance for manufacturing and how it can protect the personal assets of your company’s leadership team? Contact our partner and content contributor Matt Bottorff, MBA, eS, CLCS of Soules Insurance Agency at mbottorff@soulesinsurance.com.