Directors and officers insurance protects the people who lead your company against claims made against them personally for decisions taken in their role. It is not required by law. The personal liability it responds to, however, is created by law, and it attaches to the individual director rather than to the company. We structure D&O cover around the responsibilities your directors and officers actually carry.
What directors and officers insurance covers
D&O insurance responds when a claim is brought against a director or officer personally, alleging a wrongful act in the course of managing the company. It meets the cost of defending that claim and, where liability is established, the damages or settlement, up to the limit of the policy. Defence costs are often the more immediate concern, as they begin to accrue from the moment a claim is made and apply whether or not the allegation is ultimately upheld.
The liability your directors carry
Under the Companies Act, every director owes duties to act honestly and in the best interests of the company, to exercise reasonable care, skill, and diligence, to avoid conflicts of interest, and not to misuse company information or property. A breach of these duties can give rise to civil liability, criminal liability, personal liability for company debts in cases such as fraudulent or wrongful trading, and disqualification from acting as a director.
The accountability is personal and broad. The Companies Act does not distinguish between executive, non-executive, nominee, or so-called sleeping directors; each carries the same duties. Resigning or being removed does not release a director from liability for acts carried out while in office. Claims can be brought by the company itself, its shareholders, creditors, employees, and regulators such as ACRA and IRAS.
Who should consider it
Any company with directors and senior officers carries this exposure, regardless of size. A small private company, a funded startup, the local subsidiary of a larger group, and a non-profit management committee are all led by individuals whose personal position sits behind the decisions they take. Because the liability attaches to the person and not the balance sheet, the size of the company offers no protection to the individual.
Where the exposure sits
The most common gaps are not the absence of cover but its shape. A limit set without regard to the likely cost of defending a regulatory investigation can be exhausted before a matter is resolved. Cover that does not extend to former directors can leave someone exposed for decisions taken years earlier, given that liability survives their departure. Reviewing the limit, the definition of who is insured, and the treatment of past and outgoing directors is where the value of the cover is decided.
How we structure it
We take time to understand how your board is composed, who holds officer responsibilities, and the regulatory environment your company operates in, and we place cover with our appointed insurers around what we find. We review the structure as your board changes and as the business grows, and we remain your point of contact if a claim is made. The aim is cover that is correctly defined and adequate to the exposure, in place before it is needed.