Directors and officers liability insurance

Directors are increasingly at risk of being sued individually for alleged professional wrongdoing. It’s possible to make sure they’re protected. Find out all about D&O insurance here.

Would I benefit from business interruption insurance?

  • Does your business have directors – for example, a finance director or HR director?
  • Does your business have key managers – for example, a chief marketing officer?
  • Do you run a large or high-profile organisation?

If you answer ‘yes’ to any of these questions, then you might consider taking out directors’ and officers’ (D&O) liability insurance.

Frequently asked questions

  • What are the benefits of directors’ and officers’ (D&O) liability insurance

    Directors’ & officers’ liability insurance can protect your senior people against compensation claims made against them by shareholders, investors, employees, regulators or interested third parties. These claims are concerned with alleged acts of professional negligence and not intentionally committed illegal acts.

    D&O insurance can cover your directors and key managers from breaches of the criminal law and the civil law as well as infringements of best practice regulations.  It can cover your senior people against any awards for damages, fines and legal fees involved in claims made against them as professional individuals. It does not cover your business as a whole.

  • Can you give me an example?

    If your shareholders get together and decide that your financial director has made a misleading statement in your annual report, then they could sue her for professional misconduct. Or else the Health and Safety Executive could bring a claim against your HR director for corporate manslaughter after a fatal industrial accident in your workplace.

  • Did you know?

    The biggest jump in directors’ and officers’ liability insurance claims in 2012 was triggered by infringements of regulations. These totalled 23% of reported claims – up from 19% in 2011 and 16% in 2010*.

    Source: Towers Watson

What do I need to consider?

  • The number of directors on your board 
  • A small business with 2 or 3 directors might need £1 million cover
  • The scope of your business activities
  • A large organisation might need £50 million or even £300 million

What other business insurance cover might interest me?


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This article has been compiled using information available to us up to 01.07.15.