What is the responsibility of directors and board members (D&O)?

Directors and board members liability insurance (D&O) can provide financial protection for managers due to the consequences of actual or alleged “wrongdoing” when acting within their managerial duties. The D&O policy will pay for the costs of the defense and the financial losses caused by the litigation.

In addition, there are additional extensions within many D&O policies, which cover the costs generated by administrative and criminal proceedings or costs that arise during the investigation of regulators or prosecutors.

What are the sources of risk for directors and board members?

The sources of risk for the director and members of the board are:

• Reporting errors;
• Inaccurate or inadequate presentation of information (for example in financial statements);
• Misrepresentation in prospectus;
• Decisions exceeding the authority granted to the company manager;
• Non-compliance with regulations or laws
• And other miss-decisions that have put the company at risk