Architect Directors and Officers: Why Your Clients Need Coverage
Are your architect clients aware of their need for Directors and Officers (D&O) Insurance? Typically, when an architect firm expands and takes on a new manager or director, in many cases they will demand D&O coverage as a conditions of serving or employment because they want to be protected and have their personal assets protect.
Architect D&O and Professional Liability Insurance protects these individuals in the event they are personally sued, often in addition to the company being sued, by investors, employees, vendors, competitors, and customers, among other parties. D&O protects architect directors and officers by covering legal fees, damages and settlements.
Other losses that will typically be covered with an Architect Directors and Officers Insurance policy include:
- Legal defense costs
- Legal representation expenses
- Costs arising from extradition proceedings
- Tax contributions where the company has become insolvent and there is personal liability of an insured.
- Losses incurred for civil fines and civil penalties
- Actions between Directors of the firm
One example of when an Architect Directors and Officers policy might be of use is in the case of a shareholder complaint. Let’s say that the shareholder is claiming that the directors have increased their annual salaries and, by doing so, have decreased the dividends due to the shareholders. The shareholder brings a suit for repayment of the excessive salary against the company. In this case, a D&O insurance policy would cover the costs of investigating the lawsuit, as well as applicable legal fees, including any damages or settlements which may be awarded to the claimant shareholder.
It’s important for your Architect clients to know that there are certain exposures which can directly affect the directors and officers of an architecture firm based on the management decisions made. At PLRisk Advisors, we have the experience, knowledge, and markets to secure the policies your Architect clients require. We can help secure Directors and Officers Insurance to protect them and their companies in the event there is an allegation that they have failed to perform their duties. Please contact us today for more information at (855) 403-5982.