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Directors & Officers Liability Insurance
Directors and Officers Liability Insurance
Management Liability · Legal Defense Costs · Investigation Support — Comprehensive Protection for Corporate Decision-Makers
Enterprises may face litigation during their daily operations, exposing directors and management to potential legal liability. Directors and Officers (D&O) liability insurance helps mitigate the risks associated with business operations and the financial losses arising from lawsuits, enabling management to focus on leading the company forward.
Coverage Highlights
Key Aspects of Directors and Officers (D&O) Protection
From defending against claims to official investigations, this provides comprehensive coverage of the liability risks faced by management in the performance of their duties.
Protection against claims of misconduct
Provides coverage for claims arising from wrongful acts committed by past, present, and future company directors or senior executives in the course of performing their duties; employees holding managerial or supervisory roles are also covered.
Legal representation fees for official investigations
Coverage is also provided for legal representation costs incurred when compulsorily required to attend any official investigation or inquiry concerning company affairs.
Employment-related disputes
Employment-related allegations—such as wrongful dismissal, discrimination, or sexual harassment—made by directors, senior executives, or employees holding managerial or supervisory responsibilities.
Defense and indemnification costs
Covers legal defense costs, compensatory damages awarded by a court, out-of-court settlements, and fees for the engagement of legal professionals.
Advance payment of defense costs
Provides for the advance payment of defense costs prior to a litigation ruling, preventing cash flow pressures associated with the lawsuit from hindering management's ability to mount a defense.
Fiduciary liability risk
Covers the risk of claims arising from directors' breach of duty to the company and shareholders when acting as fiduciary of the company.
Recipient liability
Responsibilities of Directors and Officers to the Company and Investors
Directors are fiduciaries of a company, shouldering the dual responsibilities of generating profit and ensuring compliance with all relevant laws, regulations, and internal procedures—obligations that often conflict with one another.
- Act in the best interests of the company.
- There must be no conflict between the company's interests and personal interests.
- You may not derive personal benefit from your position as a director unless authorized by the company.
- Act within the scope of the company's articles of association.
- Perform directors' duties with a reasonable level of skill and a reasonable degree of care.
Why D&O
Five Reasons Why SMEs Should Purchase D&O Insurance
- Risk of breaching obligations to the company and its shareholders
- Risks of unfair dismissal and discrimination claims brought by employees
- Risks arising from violations of the Occupational Safety and Health Ordinance
- Regarding third-party liability risks
- Risk of having to attend a formal investigation or inquiry
This website aims to provide information for general reference purposes only and makes no claim to provide comprehensive information.
Product Features
Features
- Covers former, current, and incoming directors and senior officers.
- Advance payment of legal defense costs
- Employment-related claims (unfair dismissal, discrimination, sexual harassment)
- Company Reimbursement
- Suitable for SMEs and listed companies
- Employees with safeguarding management or monitoring responsibilities
- Official Inquiry/Fee for Attendance
- Out-of-court settlements and court-ordered compensation
- Extended Reporting Period
- Can be paired with comprehensive commercial liability insurance.
Main Exclusions
Key Exclusions
- Pollution or violation of any laws related to pollution prevention and control.
- Claims for compensation arising from bodily injury, illness, death, and damage to or loss of tangible property.
- Claims for compensation arising from fraud, dishonest conduct, or criminal acts.
- Claims for compensation arising from benefits obtained without legal grounds or other forms of unjust enrichment.
- Lawsuits or claims known or having arisen prior to the effective date of this insurance policy.
- Internal claims between directors or by the company against directors (with certain exceptions)
In the event of any conflict or inconsistency between the version on this website and the insurance policy, the insurance policy shall prevail.
Important Information Regarding Insurance Coverage
Before purchasing Directors and Officers (D&O) liability insurance, please note the following points to ensure the policy takes effect smoothly and claims are processed successfully:
1
To apply for insurance, the company's most recent audited financial statements must be submitted.
2
Information regarding the company structure, shareholders, and subsidiaries must be declared.
3
Must declare any record of litigation or claims from the past five years.
4
Insurance policies generally operate on a "claims-made" basis.
5
Conditions or lawsuits known prior to the policy's effective date are not covered.
6
The company must immediately notify the insurance company if it is involved in a merger, acquisition, or listing.
Partner Insurers
Partner Insurance Companies
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Claims Guide
Claims Guide
In the event of any incident that could give rise to a claim, please notify our Claims Department immediately; we will provide full assistance throughout the process of filing the report with the Labour Department and handling the claim with the insurer.
Instant Notifications
Upon receipt of a notice of claim or legal correspondence, or upon becoming aware of circumstances that may give rise to a claim, you must immediately notify our Claims Department or the insurance company, providing the policy number and an overview of the incident.
Prepare documents
Provide supporting documents, such as claim application forms, legal correspondence or court documents, board meeting minutes, relevant contracts and correspondence, and company registration and financial information.
Defense and Claims Handling
The insurance company appoints legal professionals to handle the defense and may make advance payments for defense costs prior to a ruling; settlement payments or court-ordered awards are made in accordance with the terms of the policy.
The Claims Department will contact you immediately.
Please note that a delay in notification may result in the insurance company refusing to process your claim in accordance with the terms of the policy.