D&O 101

D&O insurance is designed to protect the personal assets of directors and officers in the event they are sued in connection with their duties to the company. It can cover legal fees, settlements, and judgments related to a wide range of claims, including breach of fiduciary duty, mismanagement, and other allegations of wrongful acts.

In California, D&O insurance is particularly important because the state has a strong legal framework for holding corporate officers and directors accountable for their actions. California law imposes high standards of conduct on officers and directors, and companies can face significant liability if they fail to meet these standards. Many California companies, particularly those that are publicly traded or have a board of directors, carry D&O insurance as a way to protect their executives and directors from lawsuits and other legal claims. However, even private companies can benefit from D&O insurance as they can still face claims from investors, customers, or other parties.