Directors and officers liability insurance
The Directors & Officers Liability Insurance protects the management and executives for claims made against them while they are serving on a board of directors and/or as an officer of the company. The policy covers defense costs and damages arising out of wrongful act allegations and lawsuits brought against an organization’s directors and/or officers resulting from decisions and actions taken as part of their job duties. Directors and Officers Insurance coverage is necessary to enable managers to make decisions without having to worry about personal liability.
Personal liability of directors has come under scrutiny in recent years. Case law and publicity in the media shows that directors are more often held personally liable by shareholders, a trustee or other interested parties such as members of a cooperative. A liability claim can quickly add up considerably.
Another frequent source of a management liability claims comes from accusations of wrongful employment practices. This can include employee complaints of discrimination, wrongful termination, hostile workplace conditions, and many more. Insurance for this exposure is most often provided as a separate Employment Practices Liability Insurance.
Who is covered by D&O Insurance?
Your business, cooperative, foundation or association
If a lawsuit is brought against your business or organization claiming that the directors or officers have mismanaged funds or the strategic operations of the company, then the corporation will be covered for losses and defense costs less the retention. Pay attention that Business Liability Insurance and Umbrella Insurance don’t cover claims concerning management decisions.
Your management team.
The directors and officers of your business or organization will be protected under this insurance including their personal assets.
What is insured?
- Cover includes, among other:
- Statutory directors’ liability
- Theft of trade secrets
- Wrongful acts
- Acting carelessly towards other people
- Criminal proceedings
What’s not insured?
- Intentional illegal acts
- Illegal remuneration and personal profit
- Property damage;
- Bodily harm claims made under a previous policy;
- Legal action already taken when the policy began.
What are the limits on D&O Insurance?
These policies have a certain maximum limit of coverage, which varies greatly. The policy limit is an annual aggregate, which means that there is only one single limit for all the claims against the insured during one policy year. All defense and other costs are part of this limit.
How much does Directors and Officers Insurance cost?
The premium varies depending on the coverage your business needs, the type of business you operate, the perceived risk associated with your industry, size of the company, claim history, merger and acquisitions activity, professional backgrounds, profit and debts.
Most annual premiums for small businesses range from €850 to €3,000 per year. Large and publicly traded companies are usually considered high-risk by underwriters and could pay € 10.000 to € 30.000 per million in annual premium.
We are happy to advise you on Directors & Officers liability insurance. You can choose different types of cover and the insured amount must be determined. We will be happy to advise you.