Category
Directors & Officers
Answered By
Carl Niedbala - Founder Shield
Carl Niedbala

Before Founder Shield, Carl spent the first years of his career in roles across the venture ecosystem. From venture due diligence at Originate Ventures to growth hacking and modeling for portfolio companies at Dreamit Ventures to M&A negotiations at Pepper Hamilton, he’s seen how companies succeed (and fail) from all angles. When Carl met Benji, he was instantly energized by the possibility of rethinking the way the insurance industry worked through technology, best in class customer service, and cutting-edge marketing and branding. When he’s not dreaming about insurance, he’s probably out in the Rockaways surfing — winter, summer, rain, or shine.

What Are the Key Differences Between Directors & Officers Insurance and Personal Guarantee Insurance?

Asked by: Henry O.
Carl Niedbala - Founder Shield
Carl Niedbala

Directors & Officers (D&O) Insurance protects company directors and officers from personal liability arising from lawsuits related to their management decisions. It covers legal costs and settlements for wrongful acts.

Personal Guarantee (PG) Insurance protects individuals who have personally guaranteed business loans or leases. It covers a portion of the debt if the business defaults, easing the financial burden on the guarantor.

Key differences:
• Scope: D&O covers management actions, while PG covers personal guarantees.
• Beneficiaries: D&O benefits directors, officers, and sometimes the company; PG benefits only the guarantor.
• Coverage: D&O covers legal costs and settlements; PG covers a portion of the guaranteed debt.
• Risk Types: D&O addresses management risks, while PG addresses financial risks from personal guarantees.

Businesses and individuals need to understand these differences to choose the appropriate insurance coverage for their specific needs and exposures.

Post Views 936
09/10/2024
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