Protecting Your Organization, Your Board, Yourself: What every in-house counsel needs to know about D&O insurance

Abstract

As in-house counsel, you are expected to provide input into the analysis and management of risk for your organization. You may also be a director or officer yourself, and thus have direct exposure to some of your organization's management risks. Whether you are counsel to a publicly-traded or privately-held company or to a non-profit organization, you will want to have an understanding of the tools available to address governance risk, which include directors' and officers' liability (D&O) insurance. D&O insurance policies are complex because of the variation in provisions and scope of coverage -- there is no "standard" policy form and each insurance carrier has its own wordings. Clauses touted as coverage enhancements will have pro's and con's depending on the structure and functions of your organization's board. And there are added considerations if your company has operations in multiple jurisdictions. This article discusses D&O insurance and how it fits into an organization’s risk management process, with a focus on items of particular relevance to in-house counsel.