Directors & Officers Insurance

(Management Liability)

Directors’ and officers’ liability insurance – also known as D&O insurance – covers the cost of compensation claims made against your business’s directors and key managers (officers) for alleged wrongful acts.

Wrongful acts include:

• Breach of trust

• Breach of duty

• Neglect

• Error

• Misleading statements

• Wrongful trading

If your company has directors or key managers, directors’ and officers’ liability insurance can cover the cost of compensation claims made against them by shareholders, investors, employees, regulators, or third parties.

Directors and officers have specific duties, responsibilities, and powers relating to their positions. These are usually set out in their job description or terms of reference. If a director or officer of your company is found to have acted outside of their terms of reference, civil, criminal, or regulatory proceedings can be brought against them.

Directors’ and officers’ liability insurance covers the cost of defending these proceedings, as well as any compensation costs that arise from an unsuccessful defense.

If directors and officers do not have insurance, they face a greater risk of not being able to defend themselves against:

• Disqualification from holding the position of director

• Civil proceedings which can lead to hefty legal costs and awards for damages

• Criminal prosecution which can lead to fines and possible imprisonment