Directors Insurance, what is it?

Directors Insurance

Directors and Officers Insurance is designed to protect the assets of directors and officers of a company. The policy has two components. The first part is the direct cover component which provides indemnification to directors and officers if the company cannot do so or does not do so. The second is comprised of a reimbursement to for those amounts the company is obliged to give its officers and directors. Officers includes all individuals who have the ability to affect the financial standing of a company significantly.

With increased corporate governance and regulatory surveillance in place today, company directors and officers are under more and more pressure to carry out their duties and obligations carefully. Any failures may lead to personal liability for the individual director or for the entire board of directors, regardless of whether they are acting in a part-time, honorary or non-executive capacity.

Directors and Officers (D&O) Liability Insurance is designed to protect the assets of company directors and other individuals of a corporation against such claims.