In many cities, boarded-up windows in the central business district tell a widespread tale of companies gone bust - and business owners and board directors caught in a tangled web of litigation.

There were 60,837 business bankruptcies in 2009, up 40% from the same period a year before, according to the American Bankruptcy Institute. The number is the highest total since 1993. In  the first quarter of 2010, business failures continue unabated - 14,608 bankruptcies, up 18% FROM 2009's disastrous first quarter total. Many of these belly-up businesses are large corporations; most, however, are small, private-and family-owned companies.

Where a bankruptcy goes, litigation follows. With shareholders, investors, partners, vendors, regulatory agencies, customers and even competitors all seeking the same thing, business' owners, senior officers and board of directors are all on the hook up to the limit of their personal assets. The popular belief is that D&O insurance is needed only by large, public companies, but there are all sorts of ways that smaller, private companies get sued. With so many financial insolvencies of private companies, our D&O carriers are seeing much more D&O litigation.

Virtually every company, regardless of size, should purchase a business liability package policy that includes D&O protection. Often, commercial clients that are sole proprietors or a company owned by two brothers think they may not need D&O insurance since the owners and investors are one and the same, but the investors are only one class of litigants. There are still the regulators, vendors, customers and others.