Businesses of any size can acquire D&O insurance, but there are considerations that an insurance company must make before providing them with coverage. Smaller businesses, for example, are considered lower risks, and this makes their insurance premiums quite low. Larger businesses, though, are thought to be high risks, and as a result, their premiums are larger in size. In addition to this factor, an insurance company must decide the type of coverage that is most appropriate for a particular business.
The Aspects of a Typical Insurance Package
There are several forms of coverage available to businesses, and usually they are rolled into a single package. These packages have varying levels of coverage, and many of them allow businesses to add additional coverage if it is needed. Packages are typically composed of three features:
- Protection for directors and officers from personal liability
- Protection for the company itself
- Protection for company losses when directors and officers are indemnified
Delivering the Proper Form of Assistance
An insurance company will work with businesses to select the type of coverage that is most appropriate for them. Some other factors that must be considered are a business’ debt, its profit, and whether it has had prior claims filed against it. There are many components to D&O coverage, but an insurance company possesses the means to provide the proper assistance to a business.