All that you need to know about Directors & Officers Liability Insurance
Every successful business organisation is a reflection of the decisions and vision of its Directors and officers
In the past, company directors have often felt that they could relied on the company they manage being considered to have a separate legal existence and a limited liability. However, the liability attaching to directors and officers has increased over recent years. And recent legislation and court decisions show an increasing exposure to personal actions against directors or officers.
The policy covers legal liability including costs to defend any civil and/or criminal action against the Directors and/or Officers holding a responsible position.
- It is usual to protect the directors and officers of the parent company and its subsidiary companies. The subsidiary companies of overseas based parent companies can usually insure, although they will often have no protection for claims from the parent company itself.
- A directors and officers insurance policy will usually protect:
- All past and present directors and officers and those appointed during the currency of the policy.
- The company when it reimburses its directors and officers
Due to corporate indemnification, the D&O Insurance policy is a two-part contract. The first part provides coverage for individual directors and officers for their personal liability when they are not indemnified by the corporate entity. The second part reimburses the corporation for its obligation to indemnify its directors and officers for claims made against them. Generally, the two insuring agreements are complimentary
- Directors and officers liability - This protects the directors or officers of the company against loss arising from claims made against them jointly or severally during the period of insurance because of any wrongful act committed by them in their capacity as a director or officer.
- Company Reimbursement - This protects the company against any payment that they may elect to make and are entitled legally to make arising out of claims made against any director or officer during the period of insurance that the directors and officers section of the policy would cover.
Loss - this protection will be for:
- Damages or judgments or settlements and associated costs and expenses;
- Prosecution (criminal or otherwise) defence costs;
- All other costs and expenses;
The insured will need to obtain the written consent of insurers before they incur costs and expenses.
Wrongful Act - This includes any actual or alleged breach of duty, neglect, error, mis-statement, misleading statement, omission, breach of warranty of authority or other act wrongfully attempted by the director or officer.
Directors & Officers Liability Insurance is imperative to any modern business organisation. At Unison, we have the wealth of experience in creating tailored D&O coverage for small, medium, and large business organisations around the world. Our team of seasoned professionals will guide you through each stage of the process to draw out a policy which is customised to your requirements.