Internal liability
Claims brought by the company itself against directors or officers are a typical D&O exposure.
Personal management liability
D&O: when management decisions lead to personal liability claims.
Directors, officers and other management bodies can be personally pursued for breaches of duty. D&O insurance is designed for such financial loss claims.
External liability
Third parties or creditors may also bring claims against individual managers in certain circumstances.
Defence costs
Assessing liability and defending unjustified claims are central parts of effective D&O cover.
Policy limit
The limit should reflect company size, decision-making structure and potential financial loss.
Reporting periods
Claims-made wording, prior acts cover and extended reporting periods are critical when changing or ending a policy.
Difference from general liability
General liability mainly addresses bodily injury and property damage; D&O addresses personal management liability for financial loss.
D&O supports risk management
Documented decisions, clear responsibilities and internal controls remain important. Insurance supports risk management but does not replace it.
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