What is Directors and Officers Liability Insurance?

Directors and Officers insurance is a type of liability insurance that protects the personal assets of a company’s Directors, Officers, and senior managers if they’re sued for alleged wrongful acts while managing the business. This insurance covers claims arising from decisions and actions taken within the scope of their corporate roles, shielding them from personal financial loss due to lawsuits, regulatory investigations, or allegations of mismanagement.

Directors and Officers insurance is essential for companies of all sizes and industries, providing protection for business leaders.

What does Directors and Officers liability insurance cover?

Directors and Officers insurance provides essential protection against a variety of claims that can arise from leadership decisions. Typical cover includes:

• Claims of mismanagement: Protects Directors and Officers if they’re accused of financial mismanagement, negligence, or errors in judgement that negatively impact the company.
• Breach of duty: Covers claims that directors and officers failed to act in the best interest of shareholders, employees, or the company, leading to financial or reputational damage.
• Employment practices and HR Issues: Provides coverage for claims involving wrongful termination, discrimination, harassment, or failure to uphold employment laws.
• Regulatory investigations: Covers the legal defence costs and potential fines resulting from regulatory investigations, particularly if there are allegations of non-compliance with industry standards or laws.
• Shareholder or stakeholder claims: Protects Directors and Officers from lawsuits brought by shareholders, creditors, or other stakeholders for decisions or actions perceived as harmful to the business.

Do I need Directors and Officers liability insurance?

Directors and Officers insurance is critical for businesses where Directors and Officers are responsible for key decisions that impact the company and its stakeholders. The cover can provide the following:

• Protects personal assets – so Directors and Officers are protected from being held personally liable for claims, putting their assets at risk.
• Helps to meet Investor and Board requirements: Many investors and board members require companies to have Directors and Officers insurance in place before they’ll join or invest, as it provides reassurance against potential liability.
• Protects against risk of litigation: Any business that deals with employees, shareholders, creditors, or regulatory bodies is vulnerable to legal action. This cover provides critical support and defence for Directors in these scenarios.

All businesses, whether start-ups or multinationals – with a formal management structure or external stakeholders should consider Directors and Officers insurance to protect their leadership team from unexpected claims.

How much Directors and Officers liability insurance do I need?

The amount of Directors and Officers insurance coverage you need will depend on several factors, including the size of your business and its structure, industry regulations and the level of stakeholder engagement who might potentially make a claim against the business.

Our advisers at Acer Insurance can help assess the specific needs of your business and recommend an appropriate level of cover, ensuring adequate protection without unnecessary expense.

Why choose Acer Insurance for Directors and Officers Liability Insurance?

Acer Insurance is an established independent insurance broker, we have been arranging both personal and commercial insurance policies for more than 25 years. Our insurance brokers apply their market knowledge to find cost-effective solutions tailored to your specific insurance needs. We excel at finding innovative answers for unusual, challenging and unique insurance requirements. Expertise, integrity and personal service underpin everything we do.

Contact us for a quote today

Call 01959 528435 for an immediate quotation or leave your details below and one of our experienced team members will call you back.