The Basics of Outside Directorship Liability Coverage

Senior leaders increasingly take opportunities to sit on boards or serve as executives of outside entities. But while serving in that capacity, is an individual director or officer covered under his/her organization’s directors and officers (D&O) liability insurance policy? Although such opportunities may benefit all companies involved, it also raises significant liability issues. As a result, it is critical to understand how D&O insurance protects executives that serve on other companies’ boards. And with the increasing regulatory scrutiny that directors and officers face, organizations are more closely focusing on outside directorship liability coverage.