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Directors and Officers Insurance

 

Directors and Officers Indemnity insurance protects Directors & Officers for legal liability they may incur personally in managing a corporation. Directors & Officers may be exposed to claims brought against them by:

 

  • Shareholders (ie. statutory derivative actions)
  • Employees (ie. claims for wrongful dismissal, harassment or wrongful failure to employ or promote)
  • Statutory bodies (ie. actions brought by the Australian Securities and Investments Commission involving alleged breaches of a directors fiduciary duties or investigations commenced by WorkCover following a work incident)
  • Competitors (ie. allegations of conduct involving anti competitive behaviour)
  • The Corporation itself (ie. actions brought by a liquidator on behalf of the company alleging insolvent trading)

 

A Directors & Officers policy will generally cover the following in relation to the above actions:

 

  • Representation costs where a Director or Officer is legally required to attend an inquiry or investigation in relation to the affairs of the corporation
  • Legal costs & expenses in the defence & investigation of a Directors & Officers claim
  • Any compensation required to be paid by the insured in order to dispose of a Directors & Officers claim


Who needs Directors and Officers Insurance?

 

You should consider Director & Officers Insurance if you sit on the board of an incorporated entity. This includes private companies, incorporated associations, public companies and co-operatives.

 

Important Tips

 

Not all liabilities incurred by a Director or Officer an indemnifiable by the company itself. For example a company is not lawfully able to indemnify a Director or Officer for a liability (other than for legal costs) incurred under a compensation order under s.1317H of the Corporation Act 2001. A Directors & Officers insurance policy does not have the same indemnity restrictions and may afford cover where the company cannot.

 

A Director of Officer may still be exposed to claims even if it is found the Director or Officer did indeed act honestly. The fiduciary duty of a Director or Officer to act in good faith and in the best interests of the company creates a higher benchmark than simply acting honestly.

 

More Information

 

To obtain a quotation or further information on Directors and Officers Insurance you can contact one of our experienced insurance brokers on 1300 503 503.

 

Alternatively, click here to complete a Directors and Officers Insurance quote request online.