Directors' and Officers’ Liability Insurance

Directors and Officers Liability Insurance, also known as D&O insurance, is a specialized policy that protects directors and officers of companies from legal and financial risks arising due to their managerial decisions and actions. In today’s litigious business environment, corporate leaders can be held responsible for alleged wrongful acts, including errors, omissions, or breaches of duty, while performing their tasks.

This insurance provides coverage for defence costs and financial losses incurred due to lawsuits, investigations, or claims brought against directors and officers by shareholders, employees, customers, regulatory authorities, or other stakeholders. Additionally, the plan offers coverage for settlements and judgments, subject to policy limits and exclusions.

For instance, if a company faces a financial crisis and its stakeholders accuse the board of mismanagement, resulting in financial losses, D&O insurance will cover the legal expenses of directors and officers. Furthermore, if an executive is accused of violating employment laws, this insurance will protect the individual’s personal assets.