Understanding Director and Officer Liability Insurance

The video discusses the concept of personal liability for corporate officers and directors, particularly when they breach their duty of care. It explains how director and officer liability insurance can protect these individuals from personal financial responsibility in legal actions. The video also highlights the paradox of shareholders indirectly funding this insurance, which may protect those they could potentially sue. Additionally, it covers the limitations of such insurance, noting that state laws may vary in what they allow corporations to cover.

In what situations might the business judgment rule not protect an officer or director?

Why might it be considered a conundrum for shareholders in a derivative action?