Directors and Officers

Every successful company is built on the strength of its leaders. Whether an organization is privately owned, publicly traded or a non-profit, its directors and officers are responsible for overseeing operations and governance. Contact BrokerLink today to work with a knowledgeable insurance advisor who can help your organization mitigate potential liability risks.


What is directors and officers liability insurance?

Directors and officers (D&O) liability insurance, also known as management liability insurance, protects corporate leaders from financial loss due to allegations and lawsuits during their tenure.

Directors and officers liability insurance covers damages involving wrongful acts committed in the discharge of your duties, including: negligence, misconduct, errors and omissions, breach of duty, misleading statements or any other act that could be held against you in your capacity as a director or officer. In the event of a lawsuit, this protection would cover legal fees to defend yourself.

D&O liability insurance also provides entity coverage, or reimbursement, in cases wherein both the corporate leadership and the organization are named in a lawsuit.

How can D&O liability coverage help organizations?

D&O liability insurance can protect organizations financially, in the event of any liability claims arising from judgment errors, breaches of duty, negligence, misconduct and wrongful acts related to their activities as board members. Directors and officers can be sued by:

  • Business partners
  • Competitors
  • Employees
  • Financial institutions
  • Government agencies
  • Suppliers
  • The general public

What does directors and officers liability insurance cover?

D&O liability insurance provides protection for corporate leaders — the very people who engineer every venture’s success.

  • Directors and officers liability: covers directors and officers and/or the company if sued or taken to court for legal or regulatory compliance failure.
  • Defence costs reimbursed: covers losses or reimbursements for legal fees or any other costs incurred in defending directors and officers against lawsuits.
  • Employment practices liability: including wrongful dismissal or discretionary hiring practices lawsuits.

Additional coverage options may include:

  • Coverage for breach of contract
  • Outside directorships
  • Non-compensatory and punitive damages
  • Subsidiaries
  • Corporate bylaws and indemnification provisions

What is not covered by D&O liability?

D&O liability coverage can help organizations handle the cost of legal fees and out-of-court settlements, however it does not protect against claims of bodily injury, property, professional advice and services, pollution damage and criminal acts.

Examples of D&O liability claims

Each organization faces its own unique risks, however the following are some of the more common D&O liability claims examples:

  • Breach of fiduciary duty, such as statutory remittances that a board member can be personally liable for
  • Wrongful employment practices
  • Contract disputes
  • Copyright infringement
  • Discrimination
  • Failure to adhere to bylaws
  • Inferior corporate leadership, according to professional or industry standards
  • Legal or regulatory compliance failure
  • Mismanagement of funds
  • Passing executive decisions without proper authority
  • Slander or defamation

Claim example: Wrongful Dismissal

A senior executive’s employment was terminated after several employees complained about her behaviour toward them, including harassment. The executive sued the organization for wrongful termination. Although the executive succeeded at trial, the insurer appealed the decision of the trial judge and won the appeal with the result that no damages were paid to the executive. The total defence costs incurred were approximately $175,000.

How much does directors and officers liability insurance cost?

Multiple factors are considered to find the best directors and officers liability insurance policy for your business. The following can impact your coverage rates:

  • Number of officers and directors
  • Hiring, employment, and HR practices
  • Number of voting and non-voting shares
  • Company structure (for-profit/non-profit)

At BrokerLink, we understand that every business has unique needs, and our knowledgeable brokers can find the coverage that fits your business.

Does my company need directors and officers liability insurance?

Directors and officers liability insurance benefits companies of all sizes and industries. Whether a corporation is publicly or privately held or a not-for-profit, it’s necessary to secure your corporate leadership from exposure to liability claims that impact top talent, company finances, and even long-term survival in the face of negative PR and the risk of losing investor confidence.

Understand your risks

Directors and officers have an obligation to perform their duties with care and prudence. If lawsuits are filed due to a failure to provide appropriate practices and procedures, there may be steps you can take to mitigate your risks proactively, such as:

  • Seeking legal advice for proper termination of employees.
  • Ensuring financials are accurate and up-to-date.
  • Securing and back-up the personal information of employees and clients on a secondary secured source.
  • Creating a company harassment policy and regularly training new and existing employees on the policy.

Ask Our Brokers

Our brokers know the value of maintaining effective corporate leadership and ensuring the future growth of the business.

We work with leading insurance providers to equip your company with comprehensive directors and officers liability insurance. We share your goal in helping to protect the visionaries of your company through competitive rates and tailored plans.

  1. Tell us about your business and corporate leadership: Multiple factors are considered to find the best directors and officers liability insurance policy for your business.
  2. Discover leading options: our insurance brokers present you with various options for directors and officers liability insurance, all from leading providers. You can trust our brokers to source and recommend the most comprehensive policies at the most competitive, cost-effective rates for your business.
  3. Build the future of business: take your company to greater heights and enjoy better business with comprehensive insurance coverage that secures your corporate leaders’ creative vision.

Contact BrokerLink for a directors and officers liability quote today!


Frequently Asked Questions on D&O Insurance:

What is the difference between D&O and E&O insurance?

D&O liability insurance stands for “directors and officers” and covers allegations of wrongful acts against members of a board of a nonprofit, private or publicly-traded organization. E&O liability insurance stands for “errors and omissions,” also referred to as “professional liability,” and it helps protect those whose professional advice or lack of advice could cause bodily injury, property damage or financial loss.

Can small companies, without audited financial statements, still get D&O coverage?

Whether your company is large or small, getting coverage tailored to the unique needs of your business is important. For smaller organizations where D&O coverage may not be affordable, ask your broker about similar, alternative coverage, like management liability coverage, employment practices liability or legal expense.

Why do D&O limits also include defence costs when all other liability policies do not?

Allegations of wrongful acts and bad decision-making against directors and officers may be vague and take place over long periods of time. As a result, defence costs may greatly exceed damages paid to the claimant.

Other Ways to Find Business Insurance with BrokerLink

By coverage type

By occupation:

By province:

By city: