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Directors and Officers Insurance

Directors and Officers (D & O) insurance policies generally only provide protection for claims for losses resulting from conduct of directors and officers in their official capacity as such.

D & O insurance applies to claims for “Wrongful Acts” (as defined in the policy) of a director or officer of the “Named Insured.” “Wrongful Act” is generally defined as “any actual or alleged act, error, misstatement, misleading statement, neglect, breach of duty or omission by a director or officer of the Named Insured, or its Subsidiaries, as defined, and committed solely in their respective capacities as such. Wrongful Act does not include any actual or alleged act, error or omission committed in the performance of Professional Services.” In turn, “Professional Services” are defined as, among other possible things, underwriting, claims handling, safety engineering, insurance consulting and risk management.

D & O policies may cover the directors and officers, or it may cover the entity for which the directors and officers work. Thus, it is important to look at the declarations page and the definitions of “Named Insured” and “Additional Insured” in the policy.