The corporate practice of paying the litigation expenses of officers and directors for lawsuits related to corporate affairs is legally described by which of the following terms?

Question

Quizplus · Accepted Answer

The corporate practice of paying the litigation expenses of officers and directors for lawsuits related to corporate affairs is legally described as indemnification. This means that the company is essentially providing insurance for its officers and directors in case they are sued for actions taken in the course of their employment. This can help to attract and retain talented executives, but it also means that the company may be on the hook for significant legal expenses if its officers and directors are sued.

The Corporate Practice of Paying the Litigation Expenses of Officers