D&O insurance, or directors and officers liability insurance is used by companies to shield their executives from lawsuits related to their job performance. Often used as a tool to attract, and retain, top management talent, directors and officers insurance is sometimes actually required by the state the company is located in.

Typically, directors and officers insurance coverage is purchased by corporations that have a board of directors or management that are high profile, or exposed in their position. These people can be held liable if there is any employment breach of contract or they are not able to perform their duties as expected.

A lawsuit can be brought against top company management from a variety of sources. Customers and shareholders are often sources of these lawsuits, as the job performance of management may not be up to par. D&O insurance can provide protection in these cases.

Regulators and even competition can be a source of lawsuits against management officials. Lawsuits claiming anti-trust or unfair business practices can be brought against company management, which is where directors and officers insurance can provide a certain level of protection.

Directors and officers insurance coverage is becoming increasingly popular in the corporate world, and for good reason. Make sure your company management has the protection they need to function by purchasing a directors and officers liability insurance policy today.