If You Are Considering Incorporating Your Business, You Need Directors and Officers Business Insurance

Directors and Officer's business insurance is a policy specifically designed to protect the directors of a corporate board and their officers. However, even more important, it also protects their families and personal assets from claims against the corporation.

2017 has not been a good year for many corporations.

• In September, Equifax revealed it had suffered a security breach, and 143 million records were compromised. Lawsuits and government investigations quickly followed the revelation.
• Facebook is involved in litigation because of several data breaches.
• The SEC filed a higher than usual number of lawsuits against corporations.
• Sexual harassment lawsuits have been filed against numerous companies, explicitly naming C-level executives and other upper management.

Incorporating your business has many advantages for your company. However, there is another layer of protection you should consider before you begin the process.

If you've looked into incorporating your company you need to have another level of protection for your board. This is the purpose for D&O insurance.

Does your company need D & O business insurance if you are a new corporation?
You especially need D & O insurance when you are a new company. The first reason is that you won't be able to attract top talent for your board without the insurance. Nobody will want to expose themselves to potential liability with a plan for protection. You owe it to everybody voted onto the board.

Second, if your company is starting, then you are at your most vulnerable point for lawsuits. You are starting out, establishing the framework for your corporation, beginning new business processes, and expanding. You are going to be facing more liability.

Indemnity Won't Always Cover You
Indemnifying your board may not always work in their best interest. If your company experiences financial problems, is dissolved or becomes involved in legal actions against a board member, D&O insurance is the safer approach for the company.

Also, indemnification doesn't provide funds for a board member or officer to pay for legal representation. The D&O policy offers funds for use during the legal battle.

Also, if the director or officer is found to have acted with malicious intent or outright negligence, indemnification may not be applicable. D&O business insurance would be their layer of protection.

Bottom line is if you want to provide comprehensive protection for your board of directors and the officers in your company, you should consider D&O business insurance. It has proven its worth for other companies, and there is no reason for you to leave yourself exposed to litigation.

Incorporating your business is a big step, but for all of the promises or growth and stability, it has there also liabilities. At Culture Insurance, we help companies going through their incorporation process. Our value added is we work with your company from beginning to end. Besides offering premier insurance products, we can help you with other forms of coverage, including workers compensation.

We will also help you craft a benefits package that is attractive to current employees and potential hires. If you are considering incorporating your business, please contact us. We'll help you with the right products and answer any questions.