What Is the Purpose of Directors and Officers Liability Insurance

question 30

Multiple Choice

What is the purpose of directors and officers liability insurance?

• A) to extend coverage to include the corporation's liability against security claims
• B) to provide coverage that includes a well drafted severability clause
• C) to reimburse the corporation for amounts paid to indemnify officers and directors
• D) to provide protection over and above indemnification by the corporation

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Definitions:

Sales Agreement

A contract between a buyer and a seller specifying the terms and conditions of the sale of goods or services.

Reallocation

The process of distributing or assigning resources, responsibilities, or assets to different tasks, projects, or accounts, often to improve efficiency or meet new objectives.

Liquidated-Damage Clause

A contract provision that specifies a predetermined amount of money that must be paid as damages for failure to perform under the contract.

Punitive Nature

Refers to measures or penalties intended to punish individuals or entities for wrongdoing, often in addition to compensatory damages.