Directors and Officers insurance, often called Management Liability insurance, or shortened to D&O, protects the Directors and Officers of a company and covers both public and private companies. It also protects Owners, Managers and other decision makers. D&O covers litigation or investigation which may arise from alleged poor decision making or questionable conduct. Think of it as malpractice for decision makers. Technically, the policy covers claims which arise from wrongful acts.

‘Wrongful acts’ can be defined as an actual or alleged act, error or omission, misstatement, misleading statement or breach of duty. Claims from wrongful acts not covered under a company’s General Liability policy require a separate D&O policy to protect the company’s decision makers.

D&O claims can come from shareholders, creditors, lenders, banks, regulators and competitors amongst others.

Private companies see a range of benefits from having D&O coverage. First, the confidence the coverage provides may help to attract new directors to the Board. Second, if the company is looking for venture capital, many firms will require D&O insurance before they will invest. The third benefit relates to bankruptcy. When a company is declared insolvent, D&O insurance often stands between creditors or bankruptcy trustees and the personal assets of Directors and Officers. For further information, please see our detailed video on the benefits of D&O insurance.

This depends on the size of the company, the industry, the location and the company’s financial situation. In order to get a firm quote, an application is usually required with financial statements, business plans for start-ups and claims history. Griffiths and Armour’s expert team can help guide you through this process and secure the coverage that’s right for you.