Reason (1):
Any claims made from stockholders, employees, and clients will be made against the association, AND against the directors of the company. Rather than being held personally responsible for acts of the company, most directors and officers will demand to be protected rather than put their personal assets at risk.
Reason (2):
D&O gives the organization the ability to attract the best possible outside directors. Investors and members of your board of directors will not be willing to risk their personal assets to serve as a corporate director or officer. D&O coverage will protect the assets of the spouses, heirs and estates of the Directors and Officers.
Reason (3):
Employment practices suits constitute the single largest area of claim activity under D&O policies. Over 50% of D&O claims are employment practices related.
Reason (4):
D&O coverage can fill in gaps left by a commercial general liability policy.
Reason (5):
Competitor Claims (Anti-trust, Unfair trade practices)