Glossary

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CATEGORIES OF INSURANCE COVERAGE

D & O INSURANCE— See DIRECTORS & OFFICERS LIABILITY INSURANCE.

DIRECTORS & OFFICERS LIABILITY INSURANCE (D & O INSURANCE)
Insurance that indemnifies directors and officers of an entity if they are sued by
stockholders, employees, clients and others in conjunction with the performance of
their duties. Coverage extends to claims arising out of alleged errors in judgment,
breaches of duty, and wrongful acts related to their organizational activities.

• Since a director can be held personally responsible in some cases, most directors and officers will demand that their organization maintain D & O Insurance to protect their personal assets.
• Directors & Officers Liability Insurance is sometimes confused with ERRORS & OMISSIONS LIABILITY INSURANCE but the two are not synonymous. ERRORS & OMISSIONS addresses actual or alleged negligent acts, errors or omissions with respect to professional services; Directors & Officers addresses the execution of business managerial duties.
• Independent Directors Liability Insurance is a type of insurance that exclusively
  covers the independent directors and/or trustees of an entity (for instance, a
  mutual fund).
• Directors & Officers Insurance may include limited coverage for EMPLOYMENT PRACTICES LIABILITY INSURANCE.

E & O INSURANCE— See ERRORS & OMISSIONS LIABILITY INSURANCE.

EMPLOYMENT PRACTICES LIABILITY INSURANCE
Insurance that addresses claims made by employees, former employees or potential
employees concerning discrimination (based on age, sex, race, or disability), wrongful
termination, sexual harassment, and other employment-related allegations. It
covers the company, its directors, officers, employees and former employees.

• Claims against employers are rapidly increasing.
• Higher coverage limits for Employment Practices Liability Insurance have
  recently become the norm for the investment industry due to the large compensation packages of portfolio and other professionals.