directors & officers liability
For public listed companies, or private companies with a significant turnover, in order to protect their Directors and the Entity from an allegation of a wrongful act, they must consider obtaining a Directors & Officers Liability policy.
Directors & Officers Liability Insurance
A Directors & Officers (D&O) policy is made of the following sections:
Side A: Directors & Officers – providing protection for the Directors personal assets, should the Entity be unable to indemnify the Director.
Side B: Company Reimbursement – Financial protection for the Indemnity that Entity provided to the Director.
Side C: Securities cover – Providing protection to the entity following a shareholder claim.
Why is this cover so important?
Australia is now one of the most litigated Countries in the world. With litigation funders financing these legal actions, the defence costs of these matters can be crippling. With most claims resulting in a pre trial settlement, it is important to understand how your D&O policy limit stacks up.
How much cover do we need?
It is important to understand how your D&O policy limit stacks up.
The policy covers your defence costs & the costs to dispose of a matter (by pre trial agreement or once judgement is complete). With legal costs as they are & most claims resulting in a pre trial settlement, we are recommending higher & higher limits every year.
There are currently 700 pieces of legislation that Australian companies must adhere to. This responsiblilty falls on the Company Directors, which is proving to be increasingly difficult to keep up with. Once again, the defence costs for these matters continue to rise. Thankfully, there are additional coverage extensions available, such as Statutory Liability, which covers fines and penalties following these breaches (other than Occupational Health & Safety in some jurisdictions).