Vermont Directors and Officers Liability Insurance

We offer directors and officers liability insurance to public companies, private companies, nonprofit organizations, partnerships, and joint ventures located in Vermont. Directors and officers insurance is a form of management liability insurance which is designed to provide coverage to directors and officers of an entity, as well as the entity itself, against claims and lawsuits for wrongful acts committed in their capacity as directors or officers of the entity.

While there is no standard D&O insurance policy, insurance companies usually provide the following coverages in Vermont:

• Losses that directors and officers become personally liable to pay and for which they do not receive indemnification from the entity.
• Losses that entities pay to or on behalf of directors and officers as indemnification.
• Losses that the entity becomes liable to pay in connection with securities claims.
• Investigative expenses in connection with shareholder derivative demands.

D&O insurance policies in Vermont can usually be tailored to include only a certain coverage, such as Coverage A, or to cover only certain directors.

Any organization in Vermont can be the subject of a D&O lawsuit. While directors and officers of public companies represent a large share of D&O lawsuits, directors and officers of private companies and not-for-profit entities in Vermont face increasing risks of D&O lawsuits. In addition to shareholders, D&O lawsuits are also frequently brought by customers, employees, competitors and regulators.

What are some common exclusions in D&O insurance policies in Vermont?

Vermont directors and officers insurance policies contain multiple exclusions. Examples of policy exclusions include, but are not limited to, the following:

• Coverage generally provided by general liability insurance, such as bodily injury, property damage, personal and advertising injury.
• Coverage generally provided by employment practices liability insurance.
• Violation of ERISA.
• Losses in any way involving pollutants and radioactivity.
• Criminal or fraudulent acts (defense may be covered in certain cases).
• Losses to entities (Coverage C) involving intellectual property rights. Directors and officers are usually covered.
• Losses to entities (Coverage C) involving product liability. Directors and officers are usually covered.
• Liabilities assumed by the insured under a contract or agreement.

The specific exclusions should be carefully reviewed by Vermont applicants before purchasing any D&O policy.

How are D&O insurance premiums determined in Vermont?

Insurance companies in Vermont each have their specific and mostly unique rating plan which is used to calculate D&O insurance premiums. The basic factors of a D&O insurance rating plan are typically the entity's assets and the selected limit of liability and deductible. There are multiple other factors which can impact the D&O premium calculation, including the Vermont entity's specific industry, experience of management, claim history, and the number of years in business.

The D&O premium of Vermont for-profit entities can also be impacted by recent or prospective mergers & acquisitions, profitability, market capitalization, and quality of balance sheet.

Because D&O premiums can vary widely by insurance company, we usually request quotes from multiple insurance companies.