Directors and Officers Liability Insurance

In a heightened risk environment where directors are being held responsible for their organization’s risk strategies, directors need to be closely involved in their own and their organization’s insurance protection. The starting point for many is directors and officers (D&O) liability insurance, which protects directors in the event of legal action against them personally.

The following summary relates to corporate directors and officers (D&O) insurance policies, which are the most common form of D&O insurance. D&O insurance policies may identify the individuals and entities it covers as ‘insured persons’ either by listing their role or their name.

• Defense costs
• Damages and compensation awarded against director.
• Interest and costs awarded against a director.

D&O programs provide personal asset protection in the event of issues such as:

• Accounting irregularities
• Mergers and acquisitions
• Insolvency-related proceedings (wrongful trading / disqualification)
• Employment-related claims
• Corporate manslaughter / breaches of health and safety legislation
• Breaches of competition law

Exclusion

• Any deliberate act of fraud or dishonesty.
• Any failure to take all reasonable precautionary measures to avoid or lessen the chance of any claim being made.
• Failure to co-operate with a legal representative appointed by the insurer to defend a claim.