Directors and officers insurance protects Australian business leaders from personal liability, ensuring stability and confidence in corporate governance.

Directors and officers (D&O) insurance is a specialised policy that protects individuals in leadership roles—such as directors, company secretaries, and senior executives—from personal financial loss if they are sued for alleged wrongful acts committed in their professional capacity.

In Australia, directors face increasing scrutiny from regulators, shareholders, and other stakeholders. Claims may arise from mismanagement, breach of duty, regulatory investigations, employment disputes, or even cybersecurity failures. Without D&O insurance, these individuals could be personally liable for legal defence costs, settlements, and damages—putting their assets at risk.

Directors and officers insurance is typically included as part of a larger management liability policy or package.

A typical D&O policy includes:

• Side A cover: Direct protection for directors when the company cannot indemnify them
• Side B cover: Reimbursement to the company for indemnifying its directors and officers
• Side C cover: Protection for the company itself in securities-related claims (common for publicly listed entities)

Coverage often extends to current, former, and future directors, and may include run-off cover for claims made after a director leaves office. Policies also address employment practices liability, regulatory investigations, and crisis management expenses.

For small and medium-sized enterprises, D&O insurance is increasingly vital. Legal risks are rising, and even well-intentioned decisions can lead to costly disputes. Investors and board candidates often expect this cover as part of sound governance.

In short, D&O insurance is not just about protecting individuals—it is about safeguarding the business, preserving reputation, and enabling confident decision-making at the highest level.