Welcome to United Agencies: Duties of Directors and Officers

We have prepared this informational section to help you understand the various issues surrounding D&O liability. This section is comprised of the following page links:

D&O Insurance FAQs Sample D&O Claims Non-Profit D&O Considerations Duties of Directors and Officers D&O Terms and Definitions D&O Application Form

Duties of Directors and Officers:

Duty of Care: Directors and officers are expected to perform their duties in good faith and at a level of professionalism they reasonably believe to be in the interest of the corporation and with the care that a reasonably prudent person in a similar situation would use under similar circumstances. The duty of care is a variable benchmark dependent upon the expertise, experience and background of each director and officer.

Duty of Loyalty: The duty of loyalty prohibits directors and officers from using their positions to further or enhance their private interests and requires them to refrain from engaging in personal activities which might injure the corporation. It requires an unselfish and undivided loyalty to the corporation and demands that there be no conflict between one's self interest and that owed to the entity. Directors and officers may not realize secret profits or unfair personal gain, may not abuse corporate authority, may not compete with the corporation to it detriment, and may not transact business with the corporation unless the director or officer can demonstrate that the transaction was fair and reasonable to the corporation.

Duty of Obedience: Directors and officers are required to perform their duties in accordance with applicable statutes and the terms of the corporate charter. Directors and officers are not excused from their duties if they are unfamiliar with the laws governing their conduct. Frequently, directors and officers fail to observe traditional corporate formality, director and shareholder meetings may not be held, books and records not properly maintained and resolutions approving significant transactions may not be recorded.

D&O Insurance FAQs Sample D&O Claims Non-Profit D&O Considerations Duties of Directors and Officers D&O Terms and Definitions D&O Application Form

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United Agencies Small Business Insurance Division (Contact Us by Email)
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Phone: 800-378-5554 - or - 626-397-4700 // Fax: 626-683-7682

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