A D&O insurance policy (directors and officers) is a type of pecuniary damage liability insurance for company entities such as executive boards, supervisory boards and managing directors. They are liable to an unlimited extent with their private assets in the event of negligent mistakes while running the company. In order to protect them from this risk, companies take out D&O insurance for their corporate entities with a view to fending off or indemnifying damages claims.
A D&O insurance policy should always be individually tailored to the personal risks of governing entities. A basic distinction is made here between internal liability and external liability.
Internal liability refers to liability towards their own company based on action or omission.
External liability refers to liability towards third parties that are not part of the company and submit damages claims.
Both areas are covered by a D&O insurance policy. That being said, there are also considerable differences between policies. It is imperative that attention be paid to the following points:
- The amount insured
- Retroactive coverage (coverage for liability cases that occurred prior to the conclusion of the insurance policy, but were first discovered during the period of coverage)
- Run-off coverage (coverage for liability cases that arose during the period of coverage, but were only discovered afterwards)
- The right to choose one’s own lawyer
If a liability case arises, it is possible that the insurer will try to resist covering the costs despite the existing policy. In these cases, the advice of and representation by competent lawyers are indispensable.
- Counselling and assistance when taking out D&O insurance
- Revision and updating of existing contracts, including regarding any gaps in coverage and the need for optimisation
- Counselling in the event of a liability case
- Examination and enforcement of claims against insurers
Arrange a consultation at one of our branch offices in Cologne, Bonn, Berlin, Düsseldorf, Frankfurt, Hamburg, Munich or Stuttgart.