Directors’ Liability Insurance

What risks does Directors’ Liability Insurance cover?

As director of a company or non-profit association, you can be held personally liable for any errors you make in the exercise of your directorship. Tighter legislation only increases that risk. A wrong investment decision, a bankruptcy, late or non-submission of financial statements, an insurance policy you forgot to take out: These are just a few examples of damages that shareholders and third parties can recover from you. To avoid your private assets being used in the event of a claim, it is best to take out insurance that covers your directors' liability.

The Directors’ Liability Insurance - also known as D&O (Directors & Officers) Insurance - not only covers your personal financial risks resulting from management errors. It will also reimburse the defence and legal costs if you have to appear in court.

What should you pay attention to when you take out Directors’ Liability Insurance?

It is best if the Directors' Liability Insurance is underwritten by the company or association. After all, by taking out a single policy, all past, present and future directors are protected.

Directors’ Liability Insurance should not be confused with Professional Liability Insurance. Both insurances cover different risks: while the Director's Liability Insurance protects the director if he is sued in his personal assets for management errors, the Professional Liability Insurance protects the assets of the company in case of damage related to its activities.