Understanding DO for Public Officials

Directors and officers insurance (D&O) is a critical piece of an entity’s risk management plan. It protects individuals from personal loss if they are sued for an act relating to an organization or business they represent.

When a person decides to take a public office, they are assuming some level of risk. This can include offices that are elected or appointed as well as employees and volunteers. Decisions and actions of those in the public eye are scrutinized now more than ever.  D&O for public officials provides coverage for mistakes an individual may make while performing public duties. It offers protection for both the individual and the entity. Here is an overview of coverage:

Common Coverages

  • Breach of duty
  • Misrepresentation of the entity
  • Lack of governance
  • Errors or omissions

Common Exclusions

  • Fraudulent conduct
  • Defamation
  • Prior acts
  • Personal gain

Types of Entities Covered

  • Local governments
  • Special districts
  • Transit authorities
  • Housing authorities

Talk with an insurance provider to discuss coverage needs and risk exposure. Both factors will affect the premium.

Public officials should understand the risks involved with serving. Any decision they make carries a risk for exposure to a lawsuit. They can be held liable for mistakes made relating to a federal, state, or local office. Regardless of the entity’s size, D&O for public officials is an important insurance policy to carry.