Directors and Officers Insurance

Directors and Officers Insurance (D&O Cover) will cover costs incurred in the event of an alleged wrongful act committed by a business director or officer of the company. These claims could be brought against you by employees, regulators, shareholders, investors and third parties. Some of the wrongful acts that would be covered by this policy would be:

  • Breach of duties and contracts
  • Misleading statements and facts
  • Neglect
  • Wrongful trading or practices
  • General errors or mistakes

As a director or officer of a company you have contractual and legal responsibilities over and above that of a normal employee. These are generally set out in your contracts and terms of employment. If a claim arises your insurance will cover the cost of legal proceedings and defence as well as any compensation incurred. The consequences of not being insured can be financially great and lead to a greater risk of not being able to defend against claims, potentially losing the ability to act as a director and even criminal prosecution depending on the severity on the alleged act.

D&O cover has similarities to other insurance such as Professional indemnity, however it does not cover the whole company, only claims made directly against a director or officer. It best to speak to your broker to discuss this cover and its suitability to your situation.

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