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Directors and Officers Insurance Information

What is Directors an Officers Insurance?

Directors and Officers 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 are 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

  •  Download a Directors & Officers Insurance Application Form

For all other enquiries please contact our Underwriting Team on 1-3000-COVER.

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