Directors and Officers Liability Insurance

D&O insurance

Directors and officers (D&Os) of organisations are charged with a number of responsibilities and duties. Any breach of these can result in personal liability and expense.

For publically listed companies the risk of actions against directors and officers can stem from a number of stakeholders. These may include:

  • Shareholders
  • Creditors
  • Current and former employees
  • Customers
  • Regulators

The development of ‘class action’ litigation in Australia has created an environment that requires greater vigilance when it comes to corporate governance and the actions of directors. For private companies, actions by shareholders may be reduced as ownership is often closely held. However, the risks from other stakeholders are very real.

Arthur J. Gallagher’s role is to assess your risk and source the most appropriate D&O insurance policy to meet your organisation's needs. We work closely with clients to optimise this cover and make sure that:

  • The whole process proceeds in a timely manner
  • Documentation is accurate
  • A proactive approach is taken to dispel any concerns that may cause an insurer to prematurely form a negative view of risk.

D&O insurance solutions can provide cover for: 

  • Public, private and not-for-profit entities incorporated in both Australia and abroad (including entities traded on the TSX, LSE, AIM, JSE and NYSE)
  • Public Offering Securities including debt and equity capital raisings and initial public offerings
  • Legal representation expenses and the advance payment of defense costs
  • Civil fines and penalties
  • Run off coverage for retired directors and officers
  • Coverage for the company for securities related claims (Side C company protection)
  • Local placement for local underlyers in foreign jurisdictions

Overseas placements

The issue of local paper in overseas countries is an important insurance consideration. When an Australian-based multinational has overseas subsidiaries, and directors and officers rely solely on the Australian D&O insurance policy for worldwide protection, they may be vulnerable for several reasons:

  • Local regulations may require that a D&O insurance policy be issued by a locally licensed carrier
  • Local law may prohibit a local operation from having its parent company’s insurance policy pay claims
  • Indemnity payments by Australian based parent company to individuals in overseas jurisdictions may have adverse implications for the company
  • The local subsidiary may not be able to legally indemnify the director or officer, leaving the individual’s personal assets exposed

Find out more about D&O insurance

Arthur J. Gallagher’s insurance broking services are designed to support you every step of the way. Contact a broker today to find out more. 

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