What is directors’ and officers’ liability insurance?

A business would purchase a directors’ and officers’ liability insurance policy to protect itself and its directors and officers against legal actions brought as a result of allegations of wrongful acts including errors, misstatements, negligence, and breach of fiduciary duties. Bear in mind that directors can be held personally liable for acts of the business.

Actions would be brought by shareholders and stakeholders as well as other affected parties. Apart from paying for awards, in terms of the policy the legal costs to defend these actions would also be covered. The new Companies Act allows for the purchase of a directors’ and officers’ policy by the business on behalf of its directors and officers.

The following is excluded but not limited to: dishonesty or fraud, products defects, fines, and deliberate acts.

A prime example of when cover would be needed is if a company is liquidated, which results in an insolvency enquiry. The directors would need to be protected at this enquiry, and generally they would not have the resources to defend themselves. Insurers would step in and assist the directors with legal representation.

How to obtain a quotation

Please contact us via phone or email to request a proposal form for completion. Once returned we will approach Insurers for quotes.