Guide

Liability insurance

Directors' and officers' liability insurance

Directors and officers of businesses have various duties, responsibilities and powers in connection with their position. In most cases these are set out in a job description or terms of reference. As a result they can be held responsible for a range of issues including:

  • health and safety
  • data protection
  • maintaining satisfactory accounts
  • fraud
  • negligence

Directors' and officers' liability insurance (D&O) enables the directors and officers of a company, or the company itself, to cover themselves against such damages.

If a director or officer is found to have accidentally acted outside their terms of reference and this results in a claim, compensation and legal fees will be covered by the D&O policy. If the act was deliberate, then it may not be covered.

Your insurance broker will provide more information on this type of policy – see specialist insurance advice for your business.