I have often written about how valuable it is to have a business relationship with seasoned insurance experts. Running a business has enough challenges; expecting to know your way around all of the insurance protection your business might need or should consider can be overwhelming.
Today, the surprise insurance coverage is Directors & Officers Liability insurance. Most small business owners would think that it is not important because, after all, they are a small business…
Unaware that one of our clients was entertaining offers to sell his business, we were a little surprised when he called and asked about D&O coverage. Seems that his attorney told him to make sure that he had the coverage. The purchase agreement required the coverage, and it had to continue in place for 6 years following the sale. When asked, I explained to our client that the buyer wants to know that they can rely on the statements and documents you have provided them as to the value of your business. If any of those representations, in their opinion, are not what you promised, they want to be able to sue you up to six years after the sale…
Obtaining a Directors & Officers Liability policy while the business is in the process of being sold is very difficult. We got it done and the sale completed.