Shareholders sue the board of directors of a corporation for breach of fiduciary duty in approving an unfavorable merger. Which policy is designed to cover the directors' defense costs and any settlement?
a.Directors & Officers (D&O) Liability
b.Employment Practices Liability (EPLI)
c.Commercial Auto Liability
d.Workers' compensation
Explanation
Directors & Officers (D&O) Liability protects directors and officers from personal liability for 'wrongful acts' committed in their corporate capacity, such as alleged breaches of fiduciary duty, mismanagement, or misleading disclosures. EPLI covers employment-related wrongs (discrimination, harassment, wrongful termination), not duties owed to shareholders.
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