Understanding D&O Exposures


Course Description
Directors and officers of for-profit, publicly-held corporations and not-for-profit corporations face a number of legal liability exposures. This course is designed to give a moderately experienced person in insurance a detailed look at these exposures. The major areas this course addresses include (1) the common law and statutory legal liability exposures to which the directors and officers of publicly held corporations are subject, (2) legal defenses available to directors and officers when a claim is made against them, (3) the types of situations that give rise to these claims, (4) the factors that insurers consider when underwriting directors and officers (D&O) policies for publicly held and privately held companies, and (5) the most effective methods of preventing and controlling claims against corporate directors and officers.

Learning Objectives
Students who successfully complete this course will be able to:

  • identify the general nature and purpose of corporations, and identify the functions served by directors and officers within corporations
  • differentiate between the three key common law duties that directors and officers owe to corporations
  • identify the major federal securities laws that can give rise to D&O liability
  • identify the most important statutes (other than those pertaining to securities liability) that can subject directors and officers to claims
  • recognize the most important legal defenses that directors and officers have available to them when claims are asserted against them
  • recognize the essential nature of securities class action claims
  • recognize the major sources of securities class action claims against directors and officers, including claims from financial restatements, IPOs, change-of-control situations, stock option backdating, and private equity operations
  • recognize the various types of parallel proceedings, including derivative, op-out, ERISA stock-drop claims, and regulatory/criminal proceedings
  • identify reasons behind the four major underwriting factors considered by insurers in underwriting and pricing D&O coverage
  • identify the so-called general methods of preventing D&O claims
  • identify appropriate methods of controlling D&O losses that pertain to corporate governance, given relevant information
  • recognize the distinctive features of private companies and the types of claims commonly made against these companies
  • identify the distinctive features of nonprofit organizations, and recognize the types of claims these organizations typically face

Prerequisites: A basic understanding of commercial insurance and management liabilities.

WebCE® is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.


International Risk Management Institute, Inc. (IRMI) is the premier provider of risk and insurance continuing education and reference publications, and is considered the ultimate authority by leading insurance practitioners. Written by industry experts, IRMI courses provide the most up-to-date, practical and reliable information possible.

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