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What is directors and officers insurance?
Directors and Officers Insurance (or 'D&O Insurance') is a frequently misunderstood type of business insurance that is intended to provide cover for company directors and senior managers against any alleged 'wrong-doing' during the course of their running of their company.
Directors and officers insurance is a business liability insurance policy taken out by a business on behalf of its directors and senior company officers. If these company directors are sued personally in respect of the roles they hold within the business, the D&O insurance policy will protect them against the loss or seizure of their personal assets.
What does D&O insurance typically cover?
Sometimes known as 'directors insurance' or 'management liability insurance', directors and officers insurance covers senior company staff against wrongful acts such as:
- Actions by shareholders
- Breach of health and safety regulations
- Breach of trust
- Failure of duty of care
- Inaccuracy in company accounting procedures
- Misreporting issues
- Negligence
- Non-compliance issues
- Pension scheme mismanagement
- Pollution-related breaches
Who needs directors and officers insurance?
The roles most likely to benefit from directors and officers insurance include:
- Company director
- Company secretary
- Company executive
- Non-executive directors
- Partner
- General manager
- Senior manager
- Senior partner
What does directors and officers insurance not cover?
A D&O insurance policy covers individuals within a business, rather than the business itself. So if a company as a separate legal entity is sued, the directors and officers insurance will only cover those directors who are individually responsible for any wrongful acts.
Directors and officers insurance does also not typically cover any fraudulent or criminal acts by a company employee.
Directors and officers insurance - FAQ's
Does a privately owned business need directors and officers insurance?
The potential for the directors of any business of any size, whether publicly owned or privately owned, to face legal action for any wrongful act means that D&O insurance is as valid and necessary for any company officers who hold corporate responsibility.
What other types of insurance should I have?
As a company director or senior executive, there are several other insurance types that may be beneficial to your business, such as:
How can QuoteRack help with directors and officers insurance?
If you are interested in obtaining quotes for Directors and Officers Insurance without obligation, please click the 'Get a Quote' link to submit your details online to FCA-authorised insurance brokers who will be in touch to discuss your business insurance requirements.
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