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Directors and Officers Liability Insurance Australia
One allegation against a director shouldn’t put their home, savings and reputation on the line. Directors and officers liability insurance protects the people who make the decisions.
At VIM Cover, we help Australian boards, business owners and senior leaders compare directors and officers liability insurance across multiple insurers. Whether you need D&O liability insurance coverage for a private company, not-for-profit, pre-IPO business or larger organisation, we’ll help structure cover around how your business is actually run.
We help you make sure:
- Your personal assets are protected from covered claims
- Your legal defence and investigation costs are considered
- Your cover is structured around your position
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Our Insurers
We partner with leading insurers to help find suitable directors and officers cover at a competitive price.
What is directors and officers liability insurance?
Directors and officers liability insurance, also known as D&O insurance, is intended to safeguard the personal assets of company directors, officers and senior managers against a claim for an actual or alleged wrongful act performed in their role.
A director could be personally liable if they are accused of mismanagement, breach of duty, regulatory failure or a workplace-related issue. Defending a claim can be costly, even if the claim is ultimately dismissed.
D&O liability insurance can help cover legal defence costs, settlements, investigation costs and other covered expenses, so a single claim does not fall entirely on the individual or the business.
Shareholders, employees, regulators, competitors, creditors and even the company itself can claim against directors and officers in Australia, due to the increased regulatory scrutiny and higher expectations of corporate governance. Directors and officers insurance is a crucial component of protecting the leaders of many businesses.
What does D&O insurance coverage include?
Every policy is different, which is why we take the time to match cover to your organisation. A typical directors and officers liability insurance policy may include:
The cost of legal representation when a director or officer has to defend a claim or respond to an investigation. This is often one of the largest and most immediate expenses.
Representation costs where a director or officer is legally required to attend or respond to an investigation into the affairs of the company, including by a regulator.
Settlements and judgments
Compensation a director or officer may be required to pay to settle or resolve a covered claim.
Employment practices liability
Claims arising from workplace issues such as alleged wrongful dismissal, discrimination or harassment, depending on the policy structure.
Statutory liability
Fines, penalties and legal costs resulting from unintentional breaches of workplace health and safety, environmental or other regulatory laws, where legally insurable.
Officer liability insurance
Protection for certain officers and senior decision-makers who may be personally named in a covered claim.
The level of D&O insurance coverage, limits and exclusions vary between insurers, which is why it is important to review the detail carefully before deciding.
What is not covered by D&O insurance?
No policy covers everything, and being clear on the exclusions up front helps avoid surprises at claim time. We will explain exactly what is and is not covered in your policy, so you know where you stand before you commit. D&O insurance generally does not cover:
- Deliberate fraud, dishonesty or criminal conduct
- Intentional breaches of the law
- Claims covered under another more suitable policy, such as professional indemnity or public liability insurance
- Fines or penalties that are uninsurable by law
- Bodily injury or property damage claims, unless specifically included by the policy wording
- Claims or circumstances already known about before the policy started
Side A, Side B and Side C cover explained
A directors and officers policy is usually built from three sides of cover. Understanding the difference helps you see exactly who and what is being protected.
Side A — protection for individuals
Covers directors and officers directly for liabilities and legal defence costs when the company is unable or not permitted to indemnify them. This may apply if the company is insolvent. This is the part of the policy most closely linked to protecting personal assets.
Side B — company reimbursement
Reimburses the company when it has indemnified its directors and officers for a covered claim, such as under a Deed of Indemnity. It protects the company’s balance sheet rather than paying the individual directly.
Side C — entity / securities cover
Covers the company itself for claims arising from the trading of its securities. This is most relevant to listed and pre-IPO companies. Side C cover can be more specialised, which is where broker experience matters.
As your broker, we help you understand which sides you may need based on whether you are a private company, not-for-profit, pre-IPO business, listed company or larger organisation. We then help structure the policy accordingly.
Examples of D&O insurance claims
Directors and officers liability insurance may respond to a range of claims involving decisions made by directors, officers or senior managers.
Examples may include:
- Alleged breach of director duties
- Mismanagement of company funds
- Insolvent trading allegations
- Regulatory investigations
- Employment-related claims against directors or senior managers
- Shareholder or investor disputes
- Decisions that allegedly caused financial loss to the company or another party
- Claims involving misleading statements, reporting errors or governance failures
Not every claim will be covered, and each insurer will apply its own policy wording, limits and exclusions. That is why it is important to get advice before choosing a D&O liability insurance policy.
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Who can bring a claim against a director or officer?
You do not have to run a large public company to be exposed. Claims can come from many directions, including:
- Shareholders and investors — over decisions affecting company value
- Employees — for alleged wrongful dismissal, discrimination or harassment
- Regulators — such as ASIC, WorkCover or other authorities following an investigation or incident
- Competitors — over alleged anti-competitive conduct or misleading conduct
- Creditors and liquidators — including claims of insolvent trading
- The company itself — over an alleged breach of director duties
Smaller businesses are often more exposed, not less. They may have fewer resources to absorb the cost of a drawn-out legal dispute.
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Who does directors and officers insurance cover?
Depending on the policy, directors and officers insurance can protect:
- Past, present and future directors and officers
- Executive and non-executive directors
- Company secretaries
- Senior managers and supervisors making key decisions
- Not-for-profit and association board members
- Advisory board members, depending on the policy
- Certain officers and employees acting in a managerial capacity
D&O directors insurance is not just for listed companies. Private companies, family-owned businesses, start-ups, not-for-profits and advisory boards can all face claims against the people making decisions.
If a person can be held personally responsible for decisions made in their role, directors insurance is worth reviewing.
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Why choose VIM Cover for D&O liability insurance?
Being a leader of an organisation is enough of a challenge without having to worry about personal exposure. Whether you sit on a single board, run a family business, manage a not-for-profit or oversee a group of companies, the right D&O cover can help protect your personal assets, your reputation and the business you have built.
VIM Cover is an independent insurance broker. We are not dependent on any one insurer or product. We compare options across a panel of insurers and explain the differences, because the cheapest policy is rarely the best fit.
The right choice will depend on your structure, your sector, your contractual obligations, your risk profile and the people who need protection.
We also believe in plain-English advice. We will tell you what is covered, what is optional, what is not covered and what insurers will want to know, so you are not left to decipher a policy document on your own.
- Clear advice with no unnecessary jargon
- Practical recommendations based on how your organisation operates
- D&O insurance coverage compared across multiple insurers
- Support from quote through to claim
- Australia-wide cover
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“My experience with VIM cover was nothing but professional.”
– Laura Evans
Cover structured around your organisation
Every board and leadership team is different, and so is your D&O cover.
We take the time to understand your structure, your sector, the decisions your leaders make and any obligations you need to meet. From there, we help shape a policy around your specific risks rather than a generic, off-the-shelf option.
That means fewer potential gaps, clearer advice and cover that is structured properly from the start.
Trusted by Australian businesses
We are responsive, easy to deal with and focused on finding suitable cover, which is why businesses select VIM Cover. We do our best to research your options, clarify the differences and assist you when it counts.
Whether you are arranging directors and officers liability insurance for the first time or reviewing an existing policy, we will help you understand your options clearly.
FAQ
Popular questions people ask us.
How much does directors and officers insurance cost in Australia?
Premiums are dependent on the size and structure of your organisation, your sector, turnover, claims history, number of directors and whether you require Side A, Side B or Side C cover. The best way to get an accurate number is to compare options between insurers.
Is directors and officers insurance required?
It is not generally mandated by law, but it may be required to meet governance expectations, attract directors, satisfy investor requirements or meet contractual obligations. It is an important component of risk management for many boards.
What is the difference between D&O and management liability insurance?
D&O insurance is designed to cover claims made against the directors and officers personally in their capacity as directors and officers. Management liability insurance is a more comprehensive policy that may also provide coverage for employment practices, statutory liability, crime and tax audit issues.
Who needs D&O insurance?
D&O insurance is recommended for any organisation that has directors, officers or senior managers making decisions on its behalf. This encompasses private companies, family businesses, start-ups, not-for-profits, associations, pre-IPO and listed businesses.
Is D&O insurance the same as directors insurance?
Directors insurance is sometimes referred to as a simpler version of directors and officers insurance. The cover is intended to shield directors, officers and some senior decision makers from claims against them personally for covered claims.
Does D&O insurance cover legal defence costs?
A number of D&O policies contain legal defence costs for covered claims and investigations. The actual coverage will vary by insurer, policy language, limits and exclusions.
What is not covered by D&O insurance?
Deliberate fraud, dishonesty, criminal activity, intentional violations of law and claims that are known of prior to the policy’s inception are generally excluded from D&O coverage. Some fines and penalties may also be uninsurable by law.
Do small businesses need directors and officers insurance?
Yes, claims can be made against directors or senior managers of small businesses. Smaller companies are often more vulnerable because they may not have the financial means to withstand the expense of a legal battle.
Do not-for-profits need D&O insurance?
Yes. Many of the duties of company directors can be assumed by not-for-profit and association board members. D&O insurance can help protect board members from covered claims made against them personally.
How it works
Arranging directors and officers cover does not need to be complicated.
We start by getting to know your organisation and what needs to be protected. From there, we compare options across our insurer network and present suitable choices. When you’re familiar with the choices, we help you arrange the cover and are available to assist you if you ever need to make a claim or review your policy.
Have clear guidance, options and cover from the outset.
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