The purpose of D&O coverage is to cover directors and officers of a company in the event they are sued. Increasingly, directors face personal financial liability in an increasingly complex and litigious world. Therefore, this type of coverage is critical.
While a company’s liability may be limited, the personal liability of a director for their wrongful acts is not.
The most likely sources of claims are:
- The liquidators of insolvent companies against former directors
- New boards following a take-over
- Existing boards against officials who have been negligent, often with respect to health and safety issues