D&O insurance: Protection for company executives
Managing directors, board members, and members of supervisory or advisory boards bear far-reaching personal responsibility and therefore also considerable personal risk. Directors and officers insurance (D&O) protects them from the financial consequences of breaches of duty and safeguards their private assets in the event of an emergency.
D&O insurance is an indispensable component of modern risk management for executives. This is because decision-makers are generally liable to their company with their entire private assets if they commit breaches of duty in the course of their business activities. Prominent liability cases and landmark court decisions in recent years have led companies to pursue claims for damages against their own board members much more consistently. This has significantly increased the personal liability risk for managing directors, board members, and members of supervisory or advisory boards.
Insurance coverage for executives and top management
Directors and officers insurance (D&O) offers important protection against claims for damages and protects individual executives. The insurer covers both the costs of defending against unjustified claims and the indemnification of justified claims. The insurance coverage includes all managerial activities, from operational activities to strategic decisions. Indirectly, D&O insurance also contributes to the company's balance sheet protection, as high claims that exceed the private assets of individual board members could otherwise not be compensated.
What does D&O insurance cover?
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Defence against unjustified claims
Legal defence included
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Assumption of justified claims for damages
Financial relief for executives
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Retroactive coverage
Protection also for past actions
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International programmes
Coverage for global activities, if necessary via an international insurance programme
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late registration deadlines
Claims can also be submitted after the end of the contract
Who is D&O insurance suitable for?
- Companies of all sizes and from all industries
- Managing directors, board members, supervisory board members, and other insured persons, such as compliance officers
What to look out for when taking out D&O insurance?
- Sufficient sum insured
- Check backward coverage
- Consider international coverage
Supplementary criminal legal protection insurance
It is also advisable to take out criminal legal protection insurance. This protects not only executives, but also the company itself, for example in the event of suspected antitrust violations or environmental violations. In addition, costs are also reimbursed even if there is no threat of a liability insurance claim in connection with the alleged breaches of duty.
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