Professional Indemnity

Directors & Officers (D&O) Liability

Protecting company leaders against legal actions for alleged wrongful acts in their capacity as directors or officers.

Overview

Directors & Officers (D&O) Liability insurance provides financial protection for the directors and officers of a company, and for the company itself, against claims for 'wrongful acts' while at the helm. It covers legal costs and damages arising from lawsuits brought by shareholders, employees, customers, or regulators.

1Who needs this?

Publicly Listed Companies

Private Companies (SMEs & MNCs)

Non-Profit Organizations

Board Members & Senior Management

Heads of Departments

What it covers

Legal defense costs (including investigation costs)
Damages, judgements, and settlements
Extradition costs
Civil penalties and fines (where insurable)
Crisis management costs
Retrospective cover for past acts

What is NOT covered

Proven fraud or criminal acts
Personal profit or illegal remuneration
Bodily injury and property damage (usually covered by CGL)
Known claims or incidents prior to the policy start date
Fines and penalties that are uninsurable by law

Important Note: Coverage details, limits, and exclusions may vary depending on the specific policy terms, the insurer selected, and individual risk profiles. Always refer to the actual policy document for full terms and conditions.

Common Claim Scenarios

Shareholder Lawsuit

"Shareholders of a private company filed a lawsuit against the directors, alleging that they failed to perform proper due diligence before a major acquisition, leading to a significant drop in company value. The D&O policy covered the substantial legal defense fees and the eventual settlement amount negotiated out of court."

Frequently Asked Questions

Do SMEs need D&O insurance?

Yes. Claims against SME directors often come from regulatory bodies, employees, or creditors. Without D&O, directors' personal assets could be at risk.

Does it cover all employees?

No, it specifically covers Directors, Officers, and those in managerial/supervisory positions. However, some policies can be extended to cover the company entity for certain types of claims.

What is Side A, B, and C cover?

Side A covers individual directors when the company cannot indemnify them. Side B reimburses the company when it indemnifies directors. Side C covers the company entity itself for securities claims.

Is D&O different from Professional Indemnity?

Yes. PI covers the company's services/products, while D&O covers the management decisions and 'wrongful acts' of the leadership.

Does it cover Employment Practices Liability?

Many D&O policies include or can be extended to include EPL (wrongful dismissal, harassment, discrimination) for both the individuals and the company.