Minimizing the Risks Facing Directors and Officers of Construction Businesses

Directors and officers (D&O) liability insurance is designed to protect individuals who are sued for wrongdoing in the course of serving as directors or officers of an organization.
Categories: Business Insurance
Dec 17th, 2021 | By: CapriCMW

Directors and officers (D&O) liability insurance is designed to protect individuals who are sued for wrongdoing while serving as directors or officers of an organization. 

“The insurance helps cover defense costs and damages (awards and settlements) arising out of wrongful action allegations and lawsuits,” explains CapriCMW's Angela McKerlich, a Surety and Construction Risk Advisor.


“There has long been a misconception that D&O claims only really impact public companies,” McKerlich says. “However, all organizations of all sizes can be vulnerable to D&O exposures.”

Even among private, small businesses, leaders can be personally sued over their decisions or actions taken in the course of their duties. Employees are more educated than ever when it comes to the different avenues available for exercising and pursuing their rights, including through class actions. The potential costs of defending directors and officers against lawsuits are so astronomical that D&O insurance is now a necessity for most businesses.

“Organizations that don’t have this coverage, risk going bankrupt or sustaining losses from which they will struggle to recover properly,” Angela adds.


A business leader can be liable, putting their personal assets at risk, for a broad spectrum of offences and failures by their company as well as failing to meet their own legal obligations.  Common claims brought against directors and officers include:

  • Lack of, or poor corporate governance
  • Company or stock underperformance
  • Breach of fiduciary duty resulting in financial losses or bankruptcy
  • Non-compliance with laws and regulations
  • Employment practices and HR issues

“The list goes on,” says McKerlich, ”And as new exposures like cyber liability continue to gain prevalence, the complexity of the risk landscape surrounding directors and officers is growing fast.”


“Risk management is a proactive process that manages those risks and resulting outcomes. Its purpose is to avoid, reduce or prevent risk from imposing negative consequences.”

Here are a few recommendations from Angela for reducing your exposure:

Develop written procedures for decisions that can have a negative impact on stakeholders and ensure that they are closely followed.

Create written job descriptions for all employees and volunteers.

Promote ongoing education and professional development among all positions and departments across your organization.

Discuss the insurance options available with your broker to ensure you are adequately covered for your areas of exposure (and make adjustments as necessary as changes occur within your business).

Angela McKerlich is a Surety and Construction Risk Advisor with 30 years of insurance experience and specialized expertise in complex construction operations. Angela lends her expertise to the British Columbia Construction Association (BCCA), Southern Interior Construction Association (SICA), Northern Construction Association (NRCA), Vancouver Regional Construction Association (VRCA), Construction Foundation of BC (CFBC), and the Surety Association of Canada (SAC) in various roles. 

This content is powered by the Canadian Broker Network.


CapriCMW is a proud member of the Canadian Broker Network (CBN), an alliance of Canada’s leading independent insurance brokerages representing over 50 offices, 1,500 professionals and over $1 billion in premiums. Learn more at

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