Why Do Private Manufacturers Need D&O?
In today’s complex business world, officers of corporations are increasingly held accountable for their business decisions. This was historically considered risk only officers of public companies faced, but as the business landscape has changed, officers of private companies have become just as exposed. That’s why it’s more important than ever for private companies to invest in a directors and officers (D&O) insurance strategy.
If one of your company’s business decisions harms someone, then that party can look to you to recover their loss. And as these demands are often brought against an individual officer, that puts the personal assets of that officer at risk. For example, a party could allege that you didn’t act in good faith or that you misrepresented a deal. D&O insurance protects your officers when they make these “business decisions.”
Private companies are at risk of this from many of the same groups of people as public companies – silent shareholders, banks, creditors and customers can all be negatively impacted your business decisions, and ultimately hold you liable for damages. Anytime a private manufacturer is involved in a transaction, there’s risk associated.
Whether it’s an investor looking to recoup a loss, a competitor alleging interference, or a governmental investigation, officers of private companies are at more risk today than ever. Thankfully, D&O insurance has kept pace offering substantial coverage, and since coverage is often written in a package with other lines, private companies and their officers can enjoy this protection for a minimal investment.
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