Filling in the Gaps With Proper Coverage

Filling in the Gaps With Proper Coverage

On the surface, D&O insurance sounds similar to professional indemnity, as they both protect your business from claims of negligence and wrongful acts. However, the difference between directors and officers insurance v professional indemnity is large enough that you may need both to fully cover your business.

Professional Indemnity Insurance

Professional indemnity insurance is also known as errors and omissions insurance. Essentially, this covers your business when claims of negligence are brought against your company. Claims can also be related to financial loss a client sustained as a result of your work. This type of coverage is for the whole business and is the more common of the two insurance options.

D&O Insurance

Directors and officers insurance, or D&O, is unique in that is specifically covers directors and executives of a business rather than the whole business. This insurance relates to the decisions of management positions, including:

Investment opportunities
Negligence
Business practices deemed unfair
Employment practices
Misuse of funds
Information sharing

Which Is Right for You?

Choosing the right kind of insurance depends on your business and the risks you face. An insurance agent can assess your business and help you decide which coverage, or both, your business needs. However, just knowing there is a difference in directors and officers insurance v professional indemnity insurance means you are on the right track.

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