Which type of insurance is designed to protect directors and officers from personal losses?

Directors' and Officers' Insurance is specifically designed to protect individuals in leadership positions, such as directors and officers of a corporation, from personal losses due to legal actions taken against them in their professional capacity. This type of insurance covers defense costs, settlements, and judgments arising from claims of wrongful acts, which can include breaches of fiduciary duty, mismanagement, or failure to comply with regulations.

This coverage is crucial for attracting and retaining qualified leaders, as it provides them with the peace of mind that their personal assets will be safeguarded in the event that they are held liable while making decisions in the best interest of the organization. Without this protection, individuals might be deterred from serving in these roles due to the potential financial risks involved.

In contrast, the other types of insurance mentioned do not focus on protecting the personal liabilities of directors and officers. General Liability Insurance typically covers claims of bodily injury and property damage, Employee Benefits Insurance is related to employee welfare programs, and Professional Liability Insurance protects professionals against claims of negligence or malpractice in the services they provide, but none specifically address the personal losses faced by corporate leaders.