The directors and officers of a company are covered by a type of insurance called directors and officers insurance (D&O). This insurance offers defense against allegations that directors and officers committed wrongdoing while performing their duties. These wrongdoings may involve negligence, carelessness, mistakes, or omissions. D&O insurance also covers lawsuits brought against the business itself for alleged wrongdoing by its officers and directors.
On the other hand, professionals who give services to clients are covered by professional liability insurance (PLI), commonly known as errors and omissions (E&O) insurance. This insurance protects the professional from lawsuits alleging negligence, mistakes, or omissions in the course of their professional responsibilities. Professionals like lawyers, accountants, and doctors frequently purchase PLI. While D&O and PLI both offer coverage for lawsuits brought against specific people, there are some things that D&O insurance does not. For instance, claims involving pollution, property damage, or bodily harm are not covered by D&O insurance. Commercial General Liability (CGL) insurance often provides coverage for these kinds of claims.
On the other hand, PLI insurance covers claims relating to professional services or advice but CGL insurance does not. Claims made against a company for physical harm or property damage brought on by the operation, sale, or use of the company’s goods or services are covered by CGL insurance.
Employee physical injury is a frequent exclusion in CGL insurance coverage. This is so because most employers have workers’ compensation insurance, which covers accidents that happen to employees while they’re working. Employee physical harm is often not covered by CGL insurance because it is already covered by workers’ compensation insurance.
Last but not least, it’s critical to comprehend who is an insured under a CGL coverage. The business specified on the policy, as well as any volunteers or contract workers they may have, are all considered insured under a CGL coverage. Independent contractors may also be included in the insured as long as they are employed by the company covered by the policy.
In conclusion, even though D&O and PLI insurance both shield people against lawsuits brought against them, they are not the same. It’s critical to comprehend how these two insurance policies differ from one another as well as their respective exclusions. Furthermore, it’s critical to comprehend the scope of protection offered by CGL insurance as well as who qualifies as an insured under a CGL policy. Businesses may make sure they have the right insurance coverage to protect themselves and their employees by being aware of these distinctions.
Theft is often not covered by a general liability policy. It often covers claims involving physical harm, property damage, personal injury, and advertising injury. However, a different commercial crime insurance policy may provide coverage for theft. Understanding what is and is not covered requires thoroughly reading your policy and speaking with your insurance company.