Directors and Officers Liability Insurance: Managing Your Risk

Directors and Officers Liability Insurance

Directors and officer’s liability insurance is designed to protect anyone who has risk exposure in a corporate setting. When you are in charge of an organisation, or bear a shared management responsibility for its direction, you need to be prepared for being second-guessed by major investors, or a group of influential stockholders, activists, or others. It could be over a management decision, or just an unfortunate oversight but an employee, but with directors and officers liability insurance you can always operate comfortably knowing you are always covered. 

Bow Valley Insurance of Calgary are independent brokers of a wide array of commercial insurance products from as many as several nationally recognised companies. Our insurance experts can help you find the coverage you need for any situation.

Corporate Conflict Comes in Many Forms

Typically speaking, litigation between directors and officers and an interested party begins with an allegation that there has been a violation of one or more of the three basic duties of such corporate figures.

Every director and officer is required to perform, among other things:

  • Exercise a duty of due diligence, also called the duty of care, to act in good faith to see to the organisation’s best interests;
  • Exercise a duty of loyalty, i.e. to put the organisation’s interests ahead of one’s own and to not self-deal at its expense;
  • Exercise a duty of obedience, basically to follow the organisation’s bylaws so as to not create unnecessary corporate conflicts within the organisation.

To one’s corporate or organisational opponents, these duties may be liberally “violated” to become causes of legal action for unforeseen financial losses, a wave of unexpected lay-offs, or even result in a suit over the outcome of a hotly debated acquisition. Depending on the particulars of the matter, and the size and capital on hand in the organisation, your corporate indemnity may not be enough to prevent your personal exposure.

In addition, an officer or director can be sued or criminally charged by the authorities for failure to perform as directed by law. For instance, throwing out or falsifying regulatory reports, breaking or abusing labour laws, or failing to remediate environmental damage caused by the organisation can and does expose officers and directors to individual liability. As always, ignorance about a director’s or officer’s duties under the law is not an excuse.

Manage Your Personal Risk

As you can see, when you are at the top of the organisational chart, there is nowhere to hide from corporate acrimony should it flare into legal conflict. Consult with one of our friendly brokers about finding a coverage policy tailored to your circumstances. No matter whether you serve the largest corporation or you direct a fledgling non-profit in Calgary, we can put the power of market competition for you and find an insurance quote that’s fair and comprehensive. 

Directors and Officers Liability Insurance in Calgary 

Contact Bow Valley Insurance of Calgary for a free quote on director and officer’s liability insurance, errors and omissions insurance for professionals, or any other commercial insurance needs you may have.