Directors and officers liability insurance
Cover for directors, officers and senior managers personally when they are held liable for a decision taken in their role, and for the cost of defending them.
What it covers
Cover varies between insurers and plans. The policy wording is what decides whether a claim is payable, so read it before you buy.
- Defence costs and damages for claims against directors and officers for a wrongful act in their role
- Claims brought by shareholders, regulators, employees, creditors or competitors
- Reimbursement to the company where it has indemnified its directors
- Entity cover for securities claims against the company, where that section is included
- Investigation and regulatory inquiry costs
- Employment practices claims, where that extension is taken
Key features
- Protects individuals personally, where their own assets would otherwise be exposed
- Side A covers the individual where the company cannot indemnify; Side B reimburses the company where it does; Side C covers the entity for securities claims
- Claims-made basis, with a retroactive date, and run-off cover available after a sale or wind-up
- Cover continues for former directors for acts during their tenure, as the wording provides
- Limits are shared across all insured persons for the policy period
- Deliberate dishonesty and fraud are excluded, usually once finally established
How to buy it
Four steps, with an advisor you can reach at any of them.
Tell us about the risk
Tell us about the company, its financials, its shareholding and board, and any claims or circumstances to declare.
Underwriting details
An advisor collects the information insurers need to price the risk, and flags anything missing.
Compare quotes
We ask our partner insurers to quote, and put the cover, conditions and premium side by side.
Proposal & policy
Pick a quote, complete the proposal form and KYC, and the insurer issues the policy.
Directors and officers liability insurance: FAQs
Does the company or the director buy it?
The company buys and pays for the policy, and the directors and officers are the insured persons. One policy covers the whole board.
Are independent directors covered?
Yes, as insured persons under the company's policy, and this is one of the main reasons boards buy it. Side A cover is what responds when the company cannot indemnify them.
What is not covered?
Fraud and deliberate dishonesty once established, personal profit taken illegally, bodily injury and property damage, and claims already known at inception. Fines and penalties are covered only where the law and the policy allow.
We are a startup. Is it too early?
Investors often ask for D&O cover at or shortly after a funding round, because the obligations on the board begin immediately. It is usually arranged with the round rather than after it.