Directors and Officers Liability Insurance
Protection For Your Personal Assets And Professional Reputation
Directors and Officers Liability (D&O) insurance is designed to protect personal assets of directors and officers of corporation by providing indemnity for loss arising from a claim arising from a wrongful act in the course of performing their duties as a director or officer.
Being sued can be a traumatic and expensive experience and can put your personal assets at risk. The increasingly litigious nature of our society, the rise of class actions along with increasing corporate governance and regulatory surveillance, places great pressure on company directors and officers to perform meticulously. It is prudent to ensure that you have adequate cover.
Directors and Officers Insurance is relevant for any Director, Officer or Senior Manager of a public, private or government organisation. Claims can arise from a variety of sources, including, but not limited to:
- Employees – actions alleging discrimination, harassment, breach of employment contract, defamation, misleading misrepresentation, wrongful discipline, etc.
- Creditors – alleging that the director allowed the company to trade whilst knowing it could not pay its debts.
- Government agencies – directors and officers may be personally liable for breaches of hundreds of statutes.
- Competitors – Trade Practices Act claims brought against the directors for misleading and deceptive type conduct.
- Shareholders – alleging that the directors mismanaged the operations of the company and its funds.
In the case of individuals, the consequences can be severe as breaches of statutory regulations can lead to heavy fines and in some extreme situations, imprisonment. In many cases Directors accept a career-damaging ban simply because they cannot afford the defence costs involved.
Need guidance on the type of commercial insurance product or service that’s best for you? Talk to our broking teams today – Call us on (03) 9691 2222
Key Benefits Of Using McKenzie Ross
High level assurance that risks are transferred where intended.
A greater understanding of the risks retained in your organisation, some of which may require alternative management methods.
A formal process of risk identification that demonstrates good corporate governance to stakeholders.
Linkage between insurance and your organisation’s overall process for risk management.
Enhanced ability for ‘insurable’ risk to be transferred to insurance markets in the best possible light by demonstrating sophistication in identification and analysis.