Director and Officer Insurance for Cannabis Businesses
What is Director & Officer Insurance?
Directors and Officers (D&O) coverage was created to protect directors, officers, and spouses for actual or alleged wrongful acts in managing a company. As a director/office/board member of a company your personal assets are vulnerable if a claim is filed against the board. Typical claims can allege directors/officers of activities such as: Fraud, failure to comply with laws, failure in your fiduciary duties that lead to bankruptcy or financial loss, misrepresentation of corporate assets, theft of intellectual property, breach of contract, and unfair business practices.
D&O claims can come from competitors, investors, customers, employees, or other parties. In the case your company is sued for a D&O issue your policy can protect both the individual directors and officers as well as the company itself. In the case of bankruptcy, carriers may waive a portion or the entire deductible. Standard D&O coverage will cover settlements, legal fees, and other claim costs after a deductible has been paid.
When should I consider purchasing Director & Officer Insurance?
Privately held companies with boards/advisory committees, publicly traded companies, and non-profits should speak with their insurance professional about D&O coverage and see when investing in D&O insurance fits their timeline.
If you choose to volunteer on a non-profit board Cannabis Connect strongly recommends you ask to see a copy of their D&O insurance. Even volunteering for a non-profit can open your personal assets up to losses with D&O claims!
Tips for Choosing D&O Insurance Coverage
Reading the terms of the policy with your broker is the first step to finding the right coverage for you. You’ll want to ensure your policy covers advisory committees if you have them, particular wording on board makeup, and review the exclusions to keep you from choosing the wrong policy.
Your broker can help you negotiate terms with the carrier and break down which exclusions apply and how they apply to each claim.
Additional Questions?
There are lots of caveats with D&O coverage and the best way to learn more is to give us a call and we’ll be happy to help answer your questions. Cannabis Connect insurance has been helping private, public, and non-profit entities with D&O coverage for years.
Get a Director and Officer Insurance Quote
Protect yourself and your business by reaching out to Cannabis Connect Insurance, so we can help you find the right policy for your business.
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