When a company and its directors are sued for mismanagement or worse, who pays for the settlement? Usually, an insurance company. Each year, America's biggest firms spend a few million dollars apiece on premiums to cover their directors and officers in case disgruntled shareholders, employees or regulators take them to court. During the first six months of last year, claims worth more than $1 billion were paid by (or came due from) insurers who write directors and officers (D&O) coverage, according to Willis, an insurance broker.
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