Directors’ and officers’ policies are structured into two parts:
- Directors’ and officers’ liability: cover for the directors and officers in their personal capacity when they are unable to claim an indemnity from the company, and
- Corporate reimbursement: cover to protect the company in circumstances where it is permitted to indemnify the directors or officers, such as the repayment of legal defence costs
Other features of directors’ and officers’ insurances are:
- cover is on a ‘claims made’ basis, which means that the policy covers all claims notified to the insurer or the insured during the period of insurance, no matter when the event giving rise to the loss occurred
- past, present and future directors are covered
- the policy also indemnifies the personal legal representatives in the event of death, insolvency or bankruptcy of the insured
- cover is automatically provided for new subsidiaries up to a certain size and employees whilst acting in a managerial or supervisory capacity
- Cover is subject to an annual aggregate limit of indemnity
