Directors & Officers (D&O)
What is it?
Frontier Risk's Directors & Officers (D&O) insurance protects cannabis businesses' board members, directors, and officers by safeguarding their personal assets and providing financial coverage against lawsuits.
Why is it important?
Over a three-year span, more than one-quarter of private companies faced a Directors and Officers (D&O) claim, with the average cost of such claims reaching $400,000. This highlights the critical importance of D&O insurance for cannabis businesses. Not only does it protect against significant financial losses, but it also serves as a valuable tool to attract and retain skilled directors and officers.
What does it cover?
Liability Protection
Protects individuals from claims alleging mismanagement, breach of fiduciary duty, negligence, or other errors in decision-making.
Reimbursement Coverage
Covers reimbursement to the company when it indemnifies directors & officers for legal costs.
Entity Litigation Sheild
Extends coverage to the organization itself when named in a lawsuit alongside its directors and officers.
Securities Law Protection
Protection against claims related to securities law violations or misleading statements in disclosures.
Workplace Claims Extension
Extends to cover claims of workplace discrimination, harassment, or wrongful termination by executives.
Corporate Reimbursements
Reimburses the company when it indemnifies its directors and officers.
Why Frontier Risk?
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Common Questions
Generally, D&O insurance does not cover criminal acts committed by directors or officers. It excludes coverage for intentional or criminal acts, including fraud, embezzlement, or other illegal activities. However, legal defense costs may still be included in D&O insurance until a conviction is confirmed.
Volunteer board members are typically covered by D&O insurance policies. These policies protect board members, including volunteers, from personal liability arising from their decisions and actions while serving on a board.
D&O insurance benefits companies of all sizes, including small and medium-sized enterprises (SMEs), nonprofit organizations, and even startups. Any organization with a board of directors or officers can face lawsuits or legal challenges related to their management decisions, making D&O insurance essential for protecting board members’ personal assets and providing financial coverage against legal liabilities.
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