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Directors and Officers Liability

Colorado, Wyoming, Arizona, and Ohio

Directors and officers have a legal duty to exercise due diligence while overseeing the goings-on of the organizations they direct or serve. Directors and officers are expected to act in good faith and in the best interest of the organization and the employees of the organization. Companies purchase liability insurance to protect their personal assets, and without this insurance, many top companies could not hire the best and brightest because members of the Board of Directors could be sued and the whole company could be at risk for collapse.

Most directors have three basic duties:

  1. Duty of Care (also called Duty of Diligence), which means they are to act reasonably and in good faith of the organization
  2. Duty of Loyalty, which means directors and officers should place the interest of the organization they serve above and before their own
  3. Duty of Obedience: Behave according to the rules and laws of the organization

When directors and officers do not fulfill their duties, they may be held legally liable for the following:

  • Failing to act under a certain statute. An example of this would be record-keeping or the filing of records. If a statute is in place that requires an officer or director to maintain certain records for the organization and these records are not maintained properly or at all, then the director could be liable
  • Non-compliance with an organization’s statute. Directors and officers may be held liable for mismanagement, financial loss of the company, employee discrimination, wrongful termination or discharge, or failure to provide a safe working environment

A director or officer of an organization may also be held liable for nonperformance of their duties.

If the director or officer of the organization you are affiliated with is not performing his/her duties, there are steps you can take to hold them responsible. You should document all information relating to any incidents and report those incidents to your insurer. There are strict reporting requirements under the insurance policies of directors and officers. You should contact your insurance representative as soon as possible so an investigation can begin.

Our clients come from both public and private entities such as information technology companies, pharmaceutical companies, financial institutions, etc. We also assist with internal corporate investigations to evaluate fraud and identify criminal wrongdoing by corporate employees.

If you would like to learn more about Directors and Officers Liability or need our help in investigating a Director or Officer of your organization, please contact the attorneys at Burg Simpson Eldredge Hersh Jardine PC today to schedule an initial meeting.  We serve Colorado, Wyoming, Ohio, Arizona and clients from all over the country.

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Burg Simpson Eldredge Hersh & Jardine, P.C. is a law firm serving the Rocky Mountain Region. The firm has offices in Denver, Colorado, Cody, WY, Cincinnati, Ohio, and Phoenix, AZ. The Firm is responsible for the content on the website, this information is not to be interpreted as providing legal services, nor as proposing any form of legal advice.