Directors & Officers (D&O) Insurance
D&O insurance protects directors' and officers' personal assets from claims arising from how they manage the company. We compare the market to place cover that responds when shareholders, creditors, regulators, or employees come after a director personally.
From $500
Smaller firms
Side A/B/C
Cover Structure
15+
Insurers Compared
Recognition
THE SHORT ANSWER
Directors & Officers (D&O) insurance protects directors and officers personally when a decision they made in running the company leads to a claim - from shareholders, creditors, regulators, employees, or third parties. It is one section of a broader Management Liability policy: D&O covers the individual, Management Liability adds employment practices, statutory liability, and company cover on top.
Most companies come to us for standalone D&O when the founder or board carries the liability personally but there are no employees to insure. Once staff are on the books, a full Management Liability package usually makes more sense.
- Protects
- Directors personally
- Part of
- Management Liability
- Cover structure
- Side A / B / C
- Smaller firms from
- ~$500/yr
WHO NEEDS IT
Who needs Directors & Officers insurance?
If you sit on a board, run a company, or carry director liability on your own shoulders, a claim over a management decision lands on you personally. D&O is the cover that stands between that claim and your own assets. It's relevant well beyond large listed companies.
01
Pty Ltd Companies
Any proprietary limited company with directors carries personal liability exposure. A wide range of Commonwealth, State and Territory laws can impose personal liability on a director, regardless of how small the business is.
02
Boards & Investors
Companies with a formal board, non-executive directors, or external shareholders and investors. Investors and funding agreements often require D&O cover to be in place before they commit.
03
Not-for-Profits
Board and committee members of not-for-profits and associations are exposed in the same way as company directors, often without realising the role carries personal liability.
04
Sole-Director Companies
Where a founder is the only director, there is no one to share the liability with. A standalone D&O policy protects that one person when a claim is made against them.
POLICY SCOPE
What does Directors & Officers insurance cover?
D&O responds to claims that a director or officer mismanaged the company or breached a duty in their role. It funds the defence and any award against them, and is built from three insuring clauses - Side A, Side B, and Side C.
Usually Covered
Not Typically Covered
This is a general guide only. What is and isn't covered depends on the terms, conditions, limits and exclusions of your specific policy.
HOW THEY DIFFER
D&O vs Management Liability: which one do you need?
The two get confused constantly, so here's the clean distinction. D&O protects directors and officers personally - it's about the individual and the decisions they make running the company.
Management Liability is the broader package. It includes D&O, and adds Employment Practices Liability, statutory liability, company reimbursement, and sometimes crime cover on top.
01
D&O - the individual
Protects directors and officers personally against claims over their management decisions. The right fit for a sole-director company with no employees.
02
Management Liability - the business
D&O plus Employment Practices Liability, statutory liability, and company cover. The right fit for most SMEs once they have staff.
Most SMEs with employees are better served by Management Liability - the moment you have staff you have employment exposure that standalone D&O won't touch. Read the full D&O vs Management Liability comparison, or see the complete Management Liability package.
EXAMPLE SCENARIOS
How D&O responds: example claim scenarios
These are illustrative examples of the types of claims a D&O policy responds to, not specific Tank client claims. They show the mechanism - how cover steps in when a director is pursued personally.
An example of the kind of claim D&O responds to: a group of shareholders alleges the board misrepresented the company's financial position, and pursues the directors personally for their losses. D&O covers the directors' defence costs and any award against them, even where the allegation is ultimately unfounded.
An example of the kind of claim D&O responds to: ASIC opens an investigation into a director's conduct in running the company. The director has to engage lawyers to respond to notices and attend examinations. D&O can fund the cost of responding to a regulatory investigation, which can run long before any finding is made.
An example of the kind of claim D&O responds to: after a commercial dispute, a creditor alleges a director allowed the company to incur a debt it could not repay and pursues the director individually. D&O responds to the defence of insolvent-trading and breach-of-duty allegations brought against the director.
An example of the kind of claim D&O responds to: an employee brings a claim that names a director personally over a management decision. D&O protects the director, while the employment dispute itself sits under the Employment Practices Liability section of a broader Management Liability policy.
A Real Placement
Standalone D&O placed for a smaller law firm
A smaller law firm came to us assuming D&O would be out of reach, with the quotes they'd seen bundled into a full Management Liability package they didn't need. We identified that their main exposure was director liability rather than full Management Liability, and placed a standalone D&O policy at $500 a year that gave them the protection they needed without paying for sections that didn't apply to their structure.
Read the full write-up on the law firm D&O case study.
COMMON QUESTIONS
Directors & Officers insurance: common questions
Protect your directors' personal assets
Whether you need standalone D&O or a full Management Liability package, we compare many insurers to find the right cover at the right price for your structure.
Sydney-based. Backed by the Steadfast Network and NIBA members.