What is directors’ and officers’ insurance?
Directors’ and officers’ insurance, or D&O insurance, supports key people in a business. It steps in if they face allegations of personal wrongdoing.
This type of management liability insurance works to protect directors, officers and LLP partners. It’s for the leaders of private companies.
It can step in if they are accused of a wrongful act, such as:
- Breach of duty of care
- Breach of trust
- Negligent errors
- Defamation
- Health and safety failure
- Breach of company rules and regulations
It can help with:
- The cost of defending company leaders from such allegations
- Losses you might experience because of such a claim
- Legal representation at investigations.
Get a quote for directors' and officers' insurance. Contact us on 0808 2736 570
Mon-Fri 9 am-5 pm.
Do I need directors’ and officers’ insurance?
You may need D&O insurance if you head up a company. You could be the sole leader, or one of many.
This can apply whether your title is:
- Director
- General manager
- Officer.
Businesses generally purchase D&O insurance for their leadership teams.
When weighing up your business’ needs, consider:
Level of responsibility
Do you make the decisions about your firm’s protocol or money?
If so, claims may impact you.
In some cases, you might be banned from leading a business in the future. Assets such as your savings, car and house could even be at risk.
The more responsibility you have, the more likely you could face legal or regulatory action.
Likely claims
Do you answer to shareholders? If so, they could launch a claim if they believe your actions were careless.
You might clear your name. But the inquiry could hit your reputation. Our insurance can help with public relations costs.
Organisation type
Directors’ and officers’ insurance is for businesses. It can suit a limited company or LLP.
If you lead a charity, trustee liability insurance may be a better fit.
How much directors’ and officers’ insurance do I need?
How much directors’ insurance you may need depends on your business and role. Both affect the types of risk you could face.
Company size also matters. In a big organisation, claims can come with more cost. If this sounds like your business, setting a higher limit of indemnity may be worth considering.
A D&O insurance policy can cover you from £100,000 to £10 million. We’ll work with you to tailor directors’ and officers’ liability insurance.
What does directors’ and officers’ insurance cover?
Hiscox directors’ and officers’ insurance can cover you if:
- You face claims by investors or other shareholders, including directors
- You make a statement about a competitor that is incorrect, and they take action
- You face claims you breached your duty of care under the Health and Safety at Work Act 1974 or the Corporate Manslaughter and Homicide Act 2007.
Management liability insurance helps to defend or settle legal actions.
Please refer to the policy documents for the full details of inclusions and exclusions of this cover. Policy documents are available when purchasing online. You can also contact our customer services team for more information.
What does directors’ and officers’ insurance not cover?
We will not cover any claim, loss or investigation:
- Arising out of any dishonest or fraudulent act by an insured person. This will only apply after a judgment or other final adjudication or an admission that such act did occur
- Arising from any requirement to clean up any pollution
- Arising from any public offering of your securities, other than a failed public offering of your securities
- Following any acquisition, merger or take-over of you
- Brought by any injured party for bodily injury or property damage (other than in relation to a breach of the Corporate Manslaughter and Homicide Act 2007 or the Health & Safety at Work etc. Act 1974).
We will not make any payment on behalf of any insured person if that individual had knowledge of a material misstatement in or omission from the information provided to us upon which we agreed to provide this insurance.
Please refer to the policy documents for the full details of inclusions and exclusions of this cover. Policy documents are available when purchasing online. You can also contact our customer services team for more information.
Get a quote for directors’ and officers’ insurance
We understand that the risks to your business are unique. If you want a quote for directors' and officers' insurance, please talk to one of our UK-based insurance specialists.
You can contact us on:
0808 2736 570
Mon-Fri 9 am-5 pm.
Directors’ and officers’ insurance: FAQs
Who pays for directors’ and officers’ insurance?
Limited companies often pay for D&O insurance for their management and employees. It’s generally not something individuals purchase themselves. It’s bought as part of a business’s risk management strategy and is a tax-deductible expense (external link).
Many companies’ articles of association make provisions to indemnify directors when a claim comes against them personally. In the event the company is obliged to pay these costs for directors, our D&O insurance is designed to cover the company’s liability.
What is typical D&O coverage?
Typical D&O coverage can be hard to specify. Each case is different. At Hiscox, we can cover directors from £100,000 up to £10 million in costs.
Each director faces unique challenges. When you decide on a cover limit, you might consider factors like:
- The size of your firm
- Its risk profile
- Your level of responsibility.
Is management liability the same as directors’ and officers’ insurance?
With Hiscox, D&O insurance a key part of the management liability portfolio insurance covers for private businesses because it protects business leaders when claims are made against them personally. Management liability insurance is an umbrella term that also spans trustees and individual liability, corporate legal liability, professional and legal liability and employment practices liability insurance.
What is the difference between E&O and D&O insurance?
E&O stands for errors and omissions cover. This is an insurance type typically found in the US. It provides similar cover to professional indemnity insurance. That is, it protects businesses against complaints about errors. These could come from anyone within the business, including junior employees.
D&O instead covers business directors personally. It can help against mistakes they are liable for in relation to their management of the business.
Read more in our glossary of business insurance terms.
How much does D&O insurance cost?
Business insurance costs start at £8.40* with Hiscox. The exact cost of directors’ insurance depends on how much cover you buy.
*Figures based on an average of all business insurance policies sold to at least 10% of our customer base between April 2023 and April 2024
How can I pay for a D&O insurance policy?
With Hiscox, you can pay for D&O insurance via:
- Debit card
- Monthly or annual direct debit
If you need to change your policy, we don’t charge admin fees.
When should I get directors’ and officers’ insurance?
D&O insurance can be relevant as soon as you register as a limited company or LLP. So, once your company has a managing director and other leadership figures.
From this day, directors could face criminal proceedings. You could also be disqualified. When your business trades on the stock market, shareholders can register qualms too.
When do I not need D&O insurance?
Sole traders don’t need management liability cover. Under this arrangement, there is no distinction between you and your business.
If this is you, professional indemnity and legal protection insurance may work better.
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