When I worked for a company and was a D/O, the company had its liability insurance and the company had D and O insurance for all paid Directors/Executives and Board Members (paid and non-paid). We had 5 million on all employees and 2.5 for each Board Member. At one point, we were told were underinsured and upped it to 10 million on all in these positions. I am sure that these production companies have these policies. It is standard business practice---- especially because of fraud and actions of subordinates that can place a company in jeopardy. Every year I sat with our auditor to assure that we were adhering to proper procedure and were looking for fraudulent or improper actions--- it was something that our D/O insurer wanted to have access to or would survey us bi-annually.
We were also encouraged to purchase our own liability beyond D and O to make sure our assets were covered.
Explanation of D and O Insurance from the Hartford:
Directors and officers (D&O) liability insurance protects the personal assets of corporate directors and officers, and their spouses, in the event they are personally sued by employees, vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing a company.
The insurance, which usually protects the company as well, covers legal fees, settlements, and other costs. D&O insurance is the financial backing for a standard indemnification provision, which holds officers harmless for losses due to their role in the company. Many officers and directors will want a company to provide both indemnification and D&O insurance.
Directors and officers are sued for a variety of reasons related to their company roles, including:
Breach of fiduciary duty resulting in financial losses or bankruptcy
Misrepresentation of company assets
Misuse of company funds
Fraud
Failure to comply with workplace laws
Theft of intellectual property and poaching of competitor’s customers
Lack of corporate governance
Illegal acts or illegal profits are generally not covered under D&O insurance
https://www.thehartford.com/management-liability-insurance/d-o-liability-insurance/explained