What is directors and officers liability and why is it significant?

D&O insurance policies offer liability cover for directors, managers, and officers to protect them from claims which may arise from the decisions and actions taken within the scope of their regular duties. 
Directors & officers may be held personally liable for the losses for any acts or negligence by the director and/or officer. The Board of Directors and Executive Management can be targeted personally, either individually or collectively. Businesses purchase D&O cover because managers can make mistakes. While the liability of the company is limited, a director’s and officers liability is unlimited, which is why insurance is a must for all businesses.