Every organization needs great directors. They provide guidance and secure growth for the company now and into the future. 
You may already employ your company’s future leaders, so use these tips as you recognize great directors in your company and insure them.
Possess Decision-Making Skills
The best leaders can make decisions quickly and efficiently. They’re decisive and confident but not afraid to ask for help, and they can compromise or change directions when necessary for the company’s best interests.
Value People
Great leaders work well with teammates and value customer service. Employees who put people first, help and appreciate their coworkers, grow talents in others, give credit to teammates who deserve it and build relationships may become strong director candidates.
Stay Engaged in the Company's Future
When employees care about the company's future, suggest improvements and make change happen, they may be director material. Their engagement and hard work show commitment to the organization.
Rely on Accountability
Great directors take responsibility for their actions. Watch how employees admit to or avoid taking responsibility for mistakes to gauge their integrity.
Communicate Clearly
The ability to communicate in a clear, concise and specific way is important for directors. They must also be able to listen; identify employees who communicate well with coworkers, clients and supervisors.
Demonstrate Potential
Instead of focusing only on current performance, pay attention to potential. Great leaders can grow into the position and want to take on leadership responsibilities.
After you identify strong directors, purchase Directors and Officers (D&O) Insurance for them. This coverage protects your directors and your company from the financial repercussions of lawsuits and wrongful-act allegations, similar in concept to malpractice insurance for medical practitioners.
Even the best leaders can be accused of wrongdoing, including malicious acts, financial mismanagement, abuse of authority, slander and libel. If a current or former employee, customer, shareholder, creditor, volunteer or other person brings a lawsuit against a director, you can file a claim and the policy can help cover legal defense and related expenses.
If your organization has unusual risk factors or complex exposures, consider specialized options such as Hard-to-Place Directors and Officers (D&O) Liability.
Coverage costs vary by organization size and risk. As a general reference, some policies can cost in the range of tens of dollars per employee, and many policies carry a deductible, but exact rates depend on your specific needs.
For health-care organizations, there are tailored products—see Medical Directors Insurance for examples of coverage designed for medical leaders.
Update your policy limits regularly to make sure your directors and your company remain protected. When you're ready to secure coverage, discuss your needs and options with your insurance agent as you purchase the right coverage for your company.
Frequently Asked Questions
What does directors and officers insurance generally protect?
It typically covers defense costs and settlements for claims alleging wrongful acts by directors or officers while performing their duties, helping protect both personal assets and company finances.
Who can bring a claim against a director?
Claims can come from current or former employees, customers, shareholders, creditors, volunteers or other third parties who allege wrongdoing.
Should small organizations buy D&O coverage?
Many small organizations benefit from D&O coverage because lawsuits can be costly regardless of company size; consider your risk profile and discuss options with an agent.
How often should I review D&O policy limits?
Review limits annually or whenever your organization experiences significant changes in size, revenue, or risk exposure.