Charters, manifestos, and SPI's purpose, and forum-widening
bruce at perens.com
Mon May 14 19:48:42 UTC 2007
Jimmy Kaplowitz wrote:
> Certainly Directors & Officers insurance is one kind
> of insurance that is purchased by a company for specific individuals,
> and I don't see what's unique about that other than a different risk
> profile that makes it a reasonably common purchase.
It costs a lot more to insure a number of people for their full net
worth than it costs to insure a corporation that doesn't own anything.
Insurance cost is at least somewhat proportional to the amount you are
insuring. Covering the DDs as a group gets into the tens of Millions
pretty quickly. Thus, shifting the burden of liability from the
individual to the corporation is the essential first step in protecting
that individual without breaking the bank.
As an aside, if you have not taken a look at available D&O policies,
there are in general a lot of caveats, exceptions, and loopholes to
protect the insurer.
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