DIRECTORS’ AND OFFICERS’ (D & O) LIABILITY INSURANCE
D&O policy can protect Directors and Officers of company and their personal assets against a claim alleging wrongful act(s) committed by them whilst functioning in their capacity for the company. Such a claim might be brought by shareholders, employees, creditors, competitors or customers of the company. In an increasingly litigious society, D&O insurance offers a comprehensive risk management solution to Directors and Officers of a company. As part of total risk scenario faced by companies, Cyber Risk is emerging as a key risk faced by Boards in the twenty-first century that can affect shareholders’ interest.
If you are a Director or Officer of a company it is generally believed that you shall be protected as your risk exposure is defined by ‘limited liability’ towards the company – however, that is only if you act lawfully. A claim against you a fellow director or officer for a wrong or an alleged wrongful act can make you personally liable for the action.
Traditional D&O policies covered the Directors and Officers of a company. The coverage for the policy may now be expanded to include trustees, non-executive directors, past directors, committee members, secretaries, employees and volunteers.There are policy conditions, so you will want to make sure you understand up front the extent of coverage & what’s required on your part for coverage to apply.
Two parts of D&O:
1. Insuring Agreement A – Directors’ and/or Officers’ liability provides cover to Directors and Officers in respect of claims made personally against them and for which the company cannot, under its indemnification provisions, provide indemnity to the individual.
2. Insuring Agreement B – company reimbursement enables the corporation to be reimbursed in situations where it has granted indemnity to a Director or Officer in respect to a claim.
Let our Experienced Insurance Experts Help
Cyber Data-Risk Managers Pty Ltd works to understand not just the various D&O Insurance policies that are available today, but also the threats of today and the trends of tomorrow.
For assistance or to learn how a D&O Liability Insurance policy can help you be prepared for a claim call us on 03 8640 0962.
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