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Talk:Directors and officers liability insurance

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Will somebody please provide a lucid definition of D&O


Directors and Officers cover. Directors and Officers Liability Insurance provides financial protection for the directors and officers of your company in the event they are sued in conjunction with the performance of their duties as they relate to the company. First, you could need Directors & Officers Insurance because claims from stockholders, employees, and clients will be made against the company, and against the directors of the company. Since a director can be held personally responsible for acts of the company, most directors and officers will demand to be protected rather than put their personal assets at stake. —Preceding unsigned comment added by 62.49.122.2 (talk) 11:07, 15 September 2009 (UTC)[reply]

Reads like advertisement

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This reads like an advertisement for D&O insurance, i.e. it implies that such insurance is always beneficial and ignores its downside for stockholders. For example,

"A common misperception of D&O insurance is that it makes directors or officers able to engage in acts they know to be wrong; this is not the case."

On the contrary, such insurance must encourage more risk than would be taken without it, and cause some divergence in the interests of officers and stockholders - who are typically not insured. Warren Buffet, a more reputable authority than anonymous me on this topic, states in his 2010 letter to shareholders regarding directors and officers of Berkshire:

"...the directors who represent you think and act like owners. They receive token compensation: no options, no restricted stock and, for that matter, virtually no cash. We do not provide them directors and officers liability insurance, a given at almost every other large public company. If they mess up with your money, they will lose their money as well." Cite error: The <ref> tag has too many names (see the help page). 173.166.93.90 (talk) 00:46, 1 March 2011 (UTC)[reply]

Invalid URL

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The URL for the Related Article "CICA - 20 Questions Directors should ask about D&O Insurance" appears to be invalid. — Preceding unsigned comment added by 71.196.160.152 (talk) 19:05, 10 February 2015 (UTC)[reply]

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