One of the main ways that political entities get insurance coverage is under a D&O policy. Sometimes, the leadership of a political company can be held liable for company errors or legal issues. A D&O policy aims to reduce the risks associated with serving in a leadership role within a political company.
Keep reading to learn more about what a D&O policy is, what it covers, and how it could be used to protect your company and leadership.
What is a D&O Policy?
A directors and officers (D&O) insurance policy is useful in protecting individuals from losses connected to their leadership role in an organization. For example, if someone serves on a board of directors for an organization or other initiative, they could be held individually accountable for various legal claims against the company. A D&O policy protects company leadership from individual liability.
What is Covered Under a D&O Policy?
A D&O policy focuses on the leadership of an organization. It covers costs like legal defense funds in the case of the company being sued. If a company is sued by a former employee, a victim of a data breach, or because they failed to follow a legal rule, company leadership can be included in the lawsuit.
There are three ways that a D&O policy can benefit leaders, known as the three sides of a D&O policy. Side A covers directors and officers when the company is financially incapable of reimbursing them for their losses. Side B covers the company after they have paid for the personal losses of company leadership. Side C directly insures the company and its employees in the case of a securities lawsuit.
Different Policies for Different Companies
Some companies can get covered under a D&O policy more simpler than others. When it comes to political firms, it is easier to cover organizations that are more non-partisan. For example, it should be a relatively simple task for a 501(c)3 or non-profit organization to get covered under a D&O policy. However, groups like campaigns or super PACs are much more aligned with one political party. This will cause a D&O policy to be more expensive and have less coverage for these types of companies. This is because it’s much more challenging to insure a politicized group.
The levels of coverage that are available and best for you will depend on your organization. If you’re unsure of what coverage you need, talk to an insurance provider about the types of coverage they think could be most helpful to you.
Protect Your Employees
A D&O policy is an important part of protecting your company’s employees in the event that they are included in a lawsuit or other claim against the company. While it can be challenging and expensive to get a D&O policy for more political entities, this policy is an important part of protecting company leadership from personal losses because of company issues.
Portal Insurance offers a range of insurance options for political entities. Tell us more about your insurance needs and get started with a quote today!
