Directors & Officers and Management Liability Insurance

What is Directors and Officers Liability Insurance?

This is an insurance policy that protects the Directors and Senior managers of a company from claims that can be made directly against those Directors or Officers of a Limited Company. These are claims which arise not from the goods or services sold by the Company but arise from other "wrongful acts" which are attributed a breach of responsibility of the Directors.

Wrongful acts include:

  • breach of trust

  • breach of duty

  • neglect

  • error

  • misleading statements

  • wrongful trading

Typically the insurance covers the cost of compensation for claims made against the Directors and Senior Managers by shareholders, investors, employees, regulators or third parties.

Directors and Officers insurance is often part of a Management Liability policy which also covers Corporate Liability and Employment Practices Liability.

What types of business need Directors & Officers Insurance?

Any business established as a Limited Company.

Is Directors & Officers Insurance Compulsory?

Not usually although certain types of business may be required to buy it to demonstrate adequate levels of corporate governance or to obtain investment.

How much cover do I need?

That depends on a numbers of factors including the type of business and number of directors and employees.