Directors and officers liability insurance

What is Directors and Officers Liability (D&O) insurance?

In an increasingly litigious society a growing focus on personal accountability remains a substantial threat to directors and officers.

The legal costs for defending allegations against directors and officers can be sizeable along with potential settlements.

As a director and/or officer you may personally be liable to defend any claims brought against you. Directors and Officers Liability (D&O) insurance is designed to protect you from personal liabilities in the face of legal action.

What does D&O insurance cover?

The scope of activities covered by D&O insurance is usually described in the definition of “wrongful act”, which often means an;

• error,
• falsification,
• misleading statement,
• action or omission,
• negligence or breach of duty,

actually, or allegedly committed or attempted by a director or officer.

As with all insurance policies, terms and conditions apply. Contact us for full details.

Who could try to sue directors and officers and why?

Anyone you come into contact with during your employment could attempt to sue you, if they feel they have suffered as a result of any shortfall in your proper duties as a director and/or officer. This includes:

• employees
• shareholders
• creditors
• regulators
• customers
• competitors.

Claims can happen for a variety of reasons such as:

• regulatory investigation
• mismanagement or negligence
• libel or slander
• breach of duty of trust
• unfair dismissal or discrimination
• anti-competitive behaviour.

Even if a claim is false, you still have to defend it. This is why we recommend clients consider this vital insurance where appropriate.