Directors and officers liability Insurance (often called "D&O") is liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies.
While a corporation by definition offers some amount of personal protection against liability to employees and directors, some companies choose to offer additional protection to those key members of the executive team.
Salient Features
- ● Former, present, future directors are all covered. (All wrongful acts committed or alleged to have been committed)
- ● Parent company and existing subsidiary companies covered
- ● Defence costs payable (even in alleged criminal cases, if directors and officers are finally acquitted)
- ● Cover on claims: wrongful act committed or alleged to have been committed and all liability reported during the period covered
- ● Advancement of Defence costs
- ● Advancement of Defence costs
- ● Claims made principle: claims must be made during policy period
- ● Cover for Retired Directors
- ● Employment Practice Liability (EPL) cover for directors and officers
- ● Cover for failure / negligence to supervise against any Professional Indemnity related claims
- ● Cover for Regulatory Crisis Response
- ● Cover for Assets and Liberty Costs including prosecution, bail bond and civil bond expenses
- ● Cover for damage to reputation
- ● Cover for Heirs, Estates and Legal Representatives
- ● Emergency Costs cover
- ● Kidnap response cover
- ● Special excess protection for non executive directors
- ● Cover for pollution related claims for defence costs and shareholder claims
- ● Insured vs Insured (defence cost cover)
- ● Severability: non-guilty insured is covered
Exclusions
- ■ Fraud
- ■ Intentional non-compliant acts
- ■ Illegal remuneration or personal profit
- ■ Property damage and bodily harm
- ■ Legal action already pending when the policy begins
- ■ Claims made under a previous D&O policy
