What is Employee Dishonesty (Crime) and Directors and Officers Liability Package?
This combined package pairs crime coverage that protects a business from dishonest acts by employees with directors and officers (D&O) liability protection for company leaders. It addresses both financial loss from internal theft and liability exposures for governance decisions, helping organizations manage exposures across commercial liability and property coverage lines.
Who needs it
Small-to-medium businesses, clubs, associations, nonprofits, retailers, contractors and professional firms commonly buy this package when they have both employee exposure and potential director-level liability. Organizations that handle cash, client funds, or sensitive financial records often prioritize crime protection alongside D&O policies to cover fiduciary or management errors. Insureds sometimes review related options like the Theft, Disappearance and Destruction & Directors and Officers (D&O) Liability Package for broader combinations of coverages: Theft, Disappearance and Destruction & Directors and Officers (D&O) Liability Package.
What it typically covers
Standard elements usually include:
- Employee dishonesty or fidelity bonds that reimburse loss from employee theft of money, securities, or property.
- Coverage for forgery, alteration, and theft by third parties in some forms.
- D&O liability that responds to claims against officers and directors for alleged wrongful acts in management or fiduciary duties.
Specialized endorsements can add coverage for electronic theft or computer-related fraud; see options like the Computer Fraud and Directors and Officers Liability Package where computer-related exposures are a concern.
Common exclusions or limitations
Policies often exclude intentional criminal acts by owners, prior acts known before policy inception, certain contractual liabilities, and some cyber incidents unless specifically endorsed. Limits, sublimits, and waiting periods can also apply. Businesses should review exclusions closely and consider supplemental coverages for gaps such as cyber theft or social engineering losses.
Factors that influence cost
Underwriting factors include size of payroll, number of employees with financial access, internal controls, past claim history, financial condition of the company, and the limits requested. Strong internal controls and segregation of duties typically reduce premiums. Risk management considerations such as background checks and regular reconciliations are often looked on favorably by insurers.
Proof of insurance & compliance
Many partners, landlords, or funding sources require proof of fidelity and D&O coverage. Certificates can be issued showing limits and effective dates; endorsements or policy wording detail specific obligations. Maintain documentation of internal controls and loss-prevention procedures to support compliance and underwriting reviews.
How to get a quote
To compare options, gather basic financials, a summary of employee roles with financial access, and descriptions of board structure and past claims. If you need help evaluating coverage needs, you can ask your agent for a tailored quote and policy comparisons.
Risk scenario: a business may face loss when an employee diverts client payments, while directors could face a lawsuit over alleged mismanagement—this package seeks to address both kinds of exposures in one placement.
Frequently Asked Questions
Do employee dishonesty policies cover fraud by contractors or vendors?
Not typically; most fidelity policies focus on employees. Coverage for contractors or vendors may require separate endorsements or a broader crime policy—review specific policy language.
Will D&O cover regulatory fines or penalties?
D&O policies generally respond to claims alleging wrongful acts and often exclude criminal fines and statutory penalties. Coverage specifics vary, so consult the policy and your broker.
Can my limits be increased later if risk grows?
Yes. Insurers usually allow limit adjustments at renewal or by endorsement, subject to underwriting review and updated information about operations and controls.
Still have questions? Talk to a local insurance expert.