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Why Directors and Officers Insurance is Integral to Your Company's Risk Management Strategy

As a member of the executive leadership team of an organization, there are certain responsibilities that fall under your umbrella whether they are explicitly stated or implied. Above all, you are responsible for the management of your company’s affairs. That responsibility comes with the possibility of being sued if something is mishandled and leads to damage or injury. The cannabis industry is fast growing as more states legalize cannabis, resulting in the need for more advanced risk management strategies.

Companies large and small, public and private, for-profit and nonprofit all face Director and Officer (D&O) litigation risks. According to a survey by Chubb, the average reported loss from a directors and officers judgment was $387,000. No matter how successful your cannabis related business is, the reality is that a substantial financial loss such as $387,000 could destroy your company instantly, or set you back to a point that may be difficult to recover from.

If you are a director or officer at your organization, you could be sued for any number of reasons, including breach of fiduciary duty resulting in financial losses or even bankruptcy, fraud, failure to comply with workplace laws, and lack of corporate governance, to name a few. These suits can come from a variety of places including but not exclusive to employees, vendors, competitors, investors and, of course, customers.

No business owner wants to find him or herself in court dealing with a lawsuit, but there are precautions every business owner can take to help protect him or herself, and the business, in these situations. D&O Liability Insurance protects your personal assets along with your spouse’s if you are sued for mishandling the management of your company.

D&O coverage is often the most overlooked coverage because many cannabis and hemp businesses are small or independently run, and no one foresees the potential for operational failures and mismanagement. With all the risks cannabis companies face everyday, D&O Insurance should be a top priority. S2S Insurance Specialist's Eric Rahn states, “don’t make the mistake of assuming you are protected under your general liability policy when it comes to D&O Insurance. You should always review your policy with your insurance broker and your attorney." With proper D&O coverage, your company’s executives will be protected and your insurance will pay for legal damages and fees.


Finding an insurance carrier to provide you with D&O Insurance can be a challenge. Most major insurers do not offer cannabis D&O policies because cannabis is not legal under U.S. federal law. S2S Insurance Specialists insures the most difficult risks facing your company and is a leading provider of D&O Insurance. To learn more about how we can protect you your business, contact Eric Rahn at or click here schedule a free 15-minute consultation.


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