Directors and Officers Insurance

Do you need D&O coverage? As you might expect, it's not as simple as buying coverage and moving on. If you company is not required by state law to defend directors, then coverage — even if you buy it — won't apply.

I recommend:  Axis, an insurer focused on the real-estate industry, has good, clear descriptions of what D&O really does, as well as explanations of similar but cheaper policies which might be a better fit for small business and professionals, like employment practices liability insurance (hiring and firing disputes) and errors & omissions (mistakes made giving advice, perhaps as an architect or realtor).

Benchmark your company Get an idea of the real numbers to figure out where your company fits into the D&O scheme.

I recommend:  Tillinghast, part of management recruiting firm Towers Perrin, does an annual review of the sector (PDF file).

Review D&O plans from the big league insurers Your local bank or regular agent will be happy to talk business liability insurance, but chances are they don't D&O. In part, that's because it's an expensive product and hard to sell to small business.

I recommend:  AIG, Chubb and Ace Limited are among the largest providers.

Find coverage through your trade association Often, the best deals on business liability insurance are through a trade or professional associations. If you don't already belong, it might be a good time to join.

I recommend:  Find an association through Weddle's Association Directory online.