Directors & Officers Insurance

Directors and Officers Liability Insurance is designed to protect the personal assets of directors and officers, by providing indemnity for loss arising from a claim, as a result of a ‘wrongful act’ committed by them in the course of performing their fiduciary duty. A Wrongful Act is usually defined as an error, misleading statement, misconduct, omission, neglect or a breach of duty.
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Who is covered?

Directors and Officers are the people involved with managing and running the organisation. It covers the individual person, not the company. The people generally covered include:

  • A director, secretary or executive officer
  • An employee
  • Past, present & future natural persons
  • A natural person as deemed by legislation

Coverage and/or reimbursement of costs is only available where the company has indemnified the individual/s.

What is the standard cover provided?

  • Judgements
  • Settlements
  • Investigative costs
  • Defence costs
  • Costs to appear at inquiries or investigations

Please ensure that you read your specific schedule and policy wording to establish actual covers quoted / taken.

Some General Information

The law imposes duties upon the Directors and Officers of companies which they are personally liable for, including:

  • exercising a reasonable amount of care and diligence in the conduct of their duties and use of the power of their position
  • to not misuse information or their position to gain advantage for themselves, or to disadvantage shareholders of the company
  • preventing the company from trading whilst insolvent

Anybody involved in the management have duties and obligations which may arise from one or more of the following statutes:

  • Corporations Law
  • Workers Compensation legislation
  • Occupational Health & Safety legislation
  • Superannuation legislation
  • Trade Practices Act and Fair Trading Acts
  • Equal Employment Opportunity and Anti-Discrimination legislation
  • Income Tax Assessments
  • Act Environment legislation
  • Customs and excise legislation

Other coverage areas

In the current market, several Underwriters have released broader based Directors and Officers Liability policies, generically called “Management Liability Covers”.

A number of these policies may be endorsed to include aspects of cover such as Employment Practices Liability (ie. unfair dismissal, harassment), Statutory Liability Cover (fines and penalties) and also provide valuable access to experienced Legal Representatives. Please contact our office should you have any questions about these options.
Contact MGA to obtain an obligation free quote.