Partner for BiH
Directors & Officers (D&O) Liability
Members of a company's statutory bodies — the management board, supervisory board, executive directors and senior management — are personally liable, without limitation and to the full extent of their private assets, for the decisions they take in running the business (unlike employees, whose statutory liability is capped at a certain amount).
D&O (Directors and Officers) insurance protects executives precisely for cases in which a claim or lawsuit is brought against them for an actual or alleged error, omission or exceeding of authority in the performance of their duties. A claim may be brought by virtually anyone — the company itself, which has suffered a financial loss, other board members, shareholders, creditors, the regulator, competitors, employees or third parties.
The policy covers the claimant's financial loss, legal defence costs, the court judgment and any out-of-court settlement, thereby simultaneously protecting the executive's personal assets, the shareholders' capital and the company's own balance sheet. It is particularly important in the event of an acquisition or takeover, since the structure of the firm changes and the insured persons must be protected both before and after the completion date.
Who it is for
Joint-stock and other companies, members of the management board, executive and non-executive directors, members of the supervisory board, authorised signatories (prokuristi) and senior management — across public, private and non-profit organisations.
Key note
A company's leadership is liable for its failings WITHOUT LIMIT, to the full extent of their personal assets, whereas employees are liable by law only up to a certain amount. This is why D&O is "sleep insurance" that enables executives to make decisions more freely and securely, and represents a competitive advantage in attracting and retaining top management.
Most common exposures
Insolvency (bankruptcy); improper disclosure of information; errors in financial statements; misstatement or misreporting of profit; errors relating to write-offs; mergers, acquisitions and restructurings; defective organisation and supervision.
Types of claim
Insolvency; defective governance mechanisms; monetary fines and their coverage; entering into an unfavourable contract; administrative failure; wrongful termination of employment; reduction of a subsidy or grant; shareholder securities claims (against public companies).
Who can bring a claim
The company, other board members, shareholders, creditors, the regulator, competitors, an employee and a customer or client. We also monitor emerging risks that increasingly affect D&O cover: regulatory scrutiny from an ever-wider circle (government bodies, not only shareholders); cyber incidents and the related breach of fiduciary duty (with a note of caution — some insurers add an express cyber exclusion to the D&O policy); the use of artificial intelligence (AI); and ESG liability (environmental, social and governance factors), which is increasingly entering D&O underwriting.
Our approach
VIPOX approaches securing proper D&O protection as a process: we analyse your company's governance structure and exposures, assess the risks and the limits required, and negotiate the price and terms on your behalf and place the policy with the insurer. In the event of a loss, we manage and coordinate the entire notification and recovery process. Our strength is our independence and our knowledge of the local market and regulation, combined with a commitment to every client; and through our partnership with AON for BiH we also open up access to the international insurance market for clients — an added advantage when negotiating terms for such a specialist class of cover.