Director’s & Officers Liability Insurance
D&O insurance protects the individual director/officer against legal costs and possible damages in defending allegations of Wrongful Acts in their capacity as a Director or Officer in the management of a company.
A Wrongful Act is usually defined as an error, mis-statement, misleading statement, conduct, omission, neglect or breach of duty.
Why do you need it?
Specific duties and responsibilities are imposed on directors as to the conduct in which they run a business. The responsibilities are imposed under contract conditions, common law and statutory legislation and in most circumstances, the individual director or officer will be held personally liable.
Duties of a director include:
- manage the company
- pay the company’s expenses
- borrow money on the company’s behalf and secure the repayment of that money
- act honestly
- be reasonable careful and diligent
- use information acquired through your office for the company’s benefit
- use your position for the company’s benefit
- disclose any interest in any contracts with the company
- state whether or not the company’s profit and loss account and balance sheet give a true and fair view of the company’s position
- report on and review the results of the company’s operations during the relevant accounting period and any significant changes in the company’s affairs during that period
- prevent the company from trading while it is insolvent
- disclose any errors or matters warranting disclosure in a prospectus
- take care to see that the company does not breach the provisions of the Trade Practices Act or Fair Trading Act; anti-discrimination legislation; occupational health & safety legislation; environmental legislation and legislation that relates to the specific industry or industries in which the company trades.
What is covered?
- interest and costs
- defence costs