Casualty & LiabilityQuestion 85 of 215
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.Workers' compensation
b.Employment Practices Liability (EPLI)
c.Directors & Officers (D&O) Liability
d.Commercial Auto Liability
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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