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Will a D&O Policy help this organization?

Your Legal Questions Answered

Will a D&O Policy help this organization?

Will a D&O Policy help my organization? My company has failed to do the following;
1. remit taxes to the state and IRS
2. remit collected medical insurance premiums to the carrier in a timely manner which has caused insurance to lapse on four occasions
3. mismanaged a government grant.

If the D & O policy is not in place, you may have a very difficult time obtaining insurance, even at a high premium, to cover these known problems. If you don't disclose them on your application, they will undoubtedly not be covered because of that failure. (See: “Failure to Report Incident on Application Voids Claims-Made Liability Insurance,” March 16, 2006.)
If you have a D & O policy in place, consult your policy and your broker. Most D & O policies will not cover failure to pay taxes or other tax liabilities. Some exclude coverage for failure to obtain or maintain insurance, which might exclude the failure to pay for medical insurance. It might cover claims for mismanagement, so long as it is not simply a contractual default and did not involve self-dealing or personal profit or fall within one of the other standard exclusions.
In any case, it sounds like it is time to talk with a lawyer who can help you get out of this mess.
Sunday, March 25, 2007


It seems this non-profit needs to spend more time focusing on leadership and accountability rather than looking at just D&O to solve their problems.

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