South Carolina Directors & Officers Insurance

Your Guide to Directors & Officers Insurance in South Carolina

Local independent insurance agents can help you find the best and most affordable coverage in the Palmetto State.

South Carolina Directors and Officers Insurance

There are risks involved in running any company. Lawsuits can be brought against company directors and officers by employees, competing companies, vendors, investors, and customers. That is why it is important to protect the individuals who serve as your company’s decision makers with a solid directors and officers insurance policy.

When you are shopping for any kind of business insurance coverage, you can turn to a local independent insurance agent for help. These agents work for you, not for a particular insurance company, so they are free to work with a few competing providers as they search for a suitable policy at a reasonable price.

Contact an insurance agent near you to learn more about directors and officers insurance coverage.

What Is South Carolina Directors & Officers Insurance?

Directors and officers insurance (which is often referred to as “D&O”) is a type of commercial liability insurance.

Companies can purchase this insurance to protect the personal finances of their corporate directors and officers if they are sued for errors in judgment, mismanagement, wrongful acts, or acts of negligence.

Who Needs Directors & Officers Insurance?

Directors and officers of public, private, and non-for-profit entities expose themselves to the risk of a lawsuit every time they make a decision on the behalf of the organizations they are representing.

Fear of potential repercussions can hinder progress and prevent forward-thinking directors from making bold decisions that may benefit your organization. A D&O policy can protect these individuals from the risk of financial loss and reputational damage so they can freely make good-faith choices for your company.

If your company has a board of directors or an advisory committee, you should consider investing in a directors and officers insurance policy which can protect the individuals on these boards and committees as well as benefit your company.

What Is the Average Cost of Directors & Officers Insurance in South Carolina?

On average, business owners in the US spend about $6,000 a year for a $1 million directors and officers insurance policy. However, this doesn’t mean that your company will need to spend this much.

The cost to purchase a policy for your company will be based on factors such as the following.

  • The type of business you are insurance and how high risk it is
  • How long your company has been in business
  • Your company’s size and annual revenues
  • The terms of coverage included in your policy
  • Your company’s claims history

Small, low-risk companies pay only about $250 a year, while large corporations in high-risk industries like banking and mining frequently spend more than $10,000 a year for this coverage.

The only way to find out how much a policy will cost for your South Carolina business is to start requesting and comparing customized quotes. Independent insurance agents make comparison shopping easy.

What Is Covered Under Directors & Officers Insurance?

Directors and officers insurance can protect your corporate directors and offers by covering court costs, legal defense fees, and damages if they are accused of things such as the following.

  • Misuse of company funds
  • Failure to comply with laws and regulations
  • Shareholder suits filed over poor stock performance
  • Creditor or investor suits filed over dereliction of fiduciary duties
  • Lack of corporate governance
  • Breach of fiduciary duty that results in financial losses or bankruptcy
  • Misrepresentation of assets on a company prospectus
  • Accusation of theft of intellectual property or poaching competitors’ customers

Policies provide three main types of coverage.

  • Side-A coverage: This is designed to cover directors and officers who are not already indemnified by the corporation.
  • Side-B coverage: This is designed to reimburse the corporation when it is indemnifying its officers.
  • Side-C coverage: Also called “entity coverage,” this is designed to cover both the corporation and the directors and offers if they are named as co-defendants in a securities lawsuit.

Independent insurance agents in South Carolina can help you better understand the coverage offered by your directors and officers insurance policy.

What Is Not Covered under Directors & Officers Insurance?

Directors and officers insurance can cover against several instances of errors and acts of mismanagement because these acts are typically done in good faith.

However, D&O insurance is not a “get out of jail free card.” This insurance will not protect your company’s directors and officers against the consequences of intentional illegal acts.

The following are examples of things not covered by directors and officers insurance.

  • Fraud
  • Illegal personal profiting
  • Litigation that was started before the policy was in place
  • Bodily injury or property damage liabilities
  • Employee Retirement Income Security Act (ERISA) violations

Talk to a local independent insurance agent to learn more about directors and officers coverage exclusions.

What Is Excess Directors & Officers Insurance?

Excess directors and officers insurance, which is sometimes called “follow form coverage,” is customized insurance that is designed to supplement your primary D&O policy with additional coverage that has terms and conditions you negotiate with your insurance carrier.

Much like umbrella insurance, your excess D&O policy will kick in only after your primary D&O policy reaches its coverage limits.

If you are thinking about purchasing an excess directors and officers insurance policy, you can benefit from working with an independent insurance agent who can explain this coverage in greater detail and can help you negotiate terms and conditions that are favorable to your South Carolina company.

How Can I Find the Best Directors & Officers Insurance in South Carolina?

If you are shopping for directors and officers insurance for the first time, you probably have a lot of questions. The good news is that an independent insurance agent near you has the answers.

Independent agents can help you understand what a good D&O policy will and will not cover and can shop around to find you a suitable policy at an affordable price. Set up a one-on-one consultation with one of the more than 300 independent insurance agents in South Carolina to get help with all of your business coverage needs.

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TrustedChoice.com Article | Reviewed by Jeffrey Green

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