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.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.
Law Reference: Directors & Officers (D&O) liability practicePractice all 215 questions free — no signup required.
Related questions on this topic
- A general contractor finishes building a deck. Two months later, the deck collapses due to faulty workmanship and injures the homeowner. Which part of the contractor's CGL coverage would respond to the lawsuit?
- A customer slips and falls in a grocery store. The CGL Medical Payments (Coverage C) section will respond:
- A licensed real estate agent is sued by a buyer for failing to disclose a known leaky roof. Which type of policy is most likely to cover this claim?
- A former employee sues her ex-employer alleging sexual harassment by a supervisor and wrongful termination in retaliation for complaining. Which type of liability policy is specifically designed to respond to these allegations?
- A California retailer suffers a ransomware attack that exposes the personal data of 50,000 customers. The retailer's CGL policy excludes 'damages arising from access to or disclosure of confidential information.' Which separate policy is most likely intended to respond?
- Which statement BEST distinguishes a commercial umbrella policy from a true excess liability policy?
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California Property & Casualty Insurance License Exam · How we review