Directors and Officers Insurance

What is directors and officers insurance and what is its purpose?

Directors and officers (D&O) insurance policies, also known as management liability, offer liability cover for company managers to protect them from claims which may arise from the decisions and actions they take within the scope of their regular duties at work.

Any allegations of wrongdoing need to be investigated and defended, and this can cost a significant amount even if the case doesn’t reach court. This means directors' and officers' personal finances are at risk, so it’s essential companies provide protection through directors and officers (D&O) liability insurance.

The core purpose of a D&O policy is to provide financial protection for managers against the consequences of actual or alleged “wrongful acts” when acting in the scope of their managerial duties. The D&O policy will pay for defence costs and financial losses.

Directors and officers insurance
What could be considered a wrongful act?

This could be a breach of trust, breach of duty, neglect, error, misleading statement or wrongful trading, committed or attempted by a director or officer whilst acting in this capacity on behalf of the company.

Why should a company purchase D&O?

- Employees know their employment rights and are increasingly likely to sue

- Legal liability is shifting away from companies and towards personal liability

- Regulators are now more proactive in investigating companies


Please contact us to find out more.

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