Getting On Board With D&O

Jason, a successful business person and community-minded individual, is on the board of directors in several nonprofit organizations. He never thought about Directors and Officers (D&O) insurance—maybe because he thought that only for-profit businesses need D&O coverage. Jason learned the importance of D&O for nonprofits when one of his boards was sued for negligently hiring an executive director who walked off with the organization's cash account. Call us for D&O Liability Insurance information—profit or nonprofit.

You’re Never Too Small to Need D&O

No corporation is too small or insignificant for Directors and Officers (D&O) Insurance. This coverage protects executives and board members from a wide array of claims: from disgruntled employees suing directors for discrimination, to another company’s charge that its former employee gave you trade secrets, to a disabled person suing you for failing to make ADA-mandated accommodations.

Of course, a lawsuit may end in your favor, but you would still he socked by defense costs. D&O Insurance covers these. Directors or officers who expect the corporation to protect them against personal liability should think again: The firm's Limited Liability Coverage goes only to noninvolved stockholders. It is designed to allow people to invest in a corporation while risking nothing but their investment.  D&O Insurance provides protection that officers and directors need and deserve.

Insurance for Pros

Doctors, lawyers, and clergy are the vocations usually thought of as professions, but for insurance purposes, "professional" encompasses many more trades. In insurance, a "professional" is one who serves the public by applying experience and special skills not easily acquired or held by a large segment of public.

A professional has legal responsibility to perform a reasonable professional standard. The liability that comes from failing to meet professional standards is distinct from "general liability", which results from failing to live up to reasonable personal standard during life's common activities (driving a car, keeping one's premises safe, taking care not to endanger others during everyday pursuits, etc.). In this sense, then, professionals include such diverse vocations as architects, engineers, auctioneers, trustees, collection agents, exterminators, TPAs, marine surveyors, real estate agents, and stockholders.

The nonprofessional commonly purchases one Liability Policy to protect the home, another to protect vehicle activities, and a third to protect business activities. Umbrella Policies may raise the limits of these policies (and throw some new coverages in). A Commercial Umbrella Policy can add millions of dollars' worth of protection against a liability claim to a Business Auto or Commercial General Liability Policy. Since few losses are that large, the cost of an Umbrella Policy remains very reasonable.

Professional persons and businesses need a policy to cover malpractice or errors and omissions. Malpractice generally refers to the "touching professions", doctors, nurses and hospitals, while Errors and Omissions apply to non-touching professions, such as accountants, lawyers, and, yes, insurance agents.

Boy, you think, what a worker! He's working away so intensely on that computer that he doesn't even realize it's quitting time! That good worker may be an Internet addict or computer game zombie. Some businesses are discovering inordinate amounts of non-business activity taking up their time and computers. To protect your firm, set up a personnel policy that is anti-game and prohibits unapproved software use.

End the Games People Play

DVD Software of Orange County, CA estimates that computer game-playing in the United States costs businesses $50 billion annually in terms of lost work time. Management must take steps to eliminate this kind of playing around. Ungame is software that can search, detect, and (optionally) delete games from a network server's disk. Ungame has been used by the Mississippi Workers Compensation Commission, the College of Business at the University of Oregon, and various businesses. Contact Dana Hollander of DVD Software, Inc., (714) 757-0615, for more information.

How Do Others See Your Firm?

"Little Things Mean a Lot" is a song that can apply to businesses as well as couples. Factors that management considers unimportant can be enough to cause the public to switch business to another firm.

Consider these image-affecting factors:

These items may appear trivial, but it's the little things that count for—and against—you.


How You Can Help the Arts

Whether you're for them or against them, you can't deny that new government cutbacks are going to hurt the arts. What can your business do to help? You might not be able to become the prime sponsor of the Monet traveling art exhibit or the local appearance of the Joffrey Ballet—but you can contribute to arts-related activities in ways that go beyond simple donations of money. Consider the following alternative options:

Arts involvement is good for company morale and for the community. And when it's good for the community, it's good for the reputation of your business.


To Be Caught With a Thief

Ratco, a payroll firm, did all the bookkeeping for Boylan, Inc. After several years of good service to Boylan, Ratco entered bankruptcy . In its last desperate throes, the firm dipped into Boylan's funds.

The first Boylan heard of it when the IRS demanded back taxes and accompanying penalties- due because Ratco had failed to pass the money Boylan owed in business taxes to the government. Boylan may now be headed down the same row as Ratco, when its only crime was to be uninsured.

Crime Coverage could have compensated for Boylan's loss. By adding an endorsement to its Employee Dishonesty Policy, it could have included Ratco as an "employee" against whose crimes Boylan would have been protected.