Directors' and Officers' Insurance for company boards
Directors' and officers' insurance protects the personal assets of your directors and senior managers when they are accused of mismanaging the company. Specialist brokers compare cover for private companies, groups and their boards.
- Personal cover for directors and senior managers
- Defence costs for investigations and prosecutions
- Reimburses the company when it pays for directors
Reviewed October 2026 by the MyBusinessComparison.com editorial team
What is directors' and officers' insurance?
Directors' and officers' insurance protects company directors, officers and senior managers against personal claims alleging they made wrongful decisions or breached their duties while running the business. It pays defence costs, settlements and damages that would otherwise fall on the individual and could reach their home and personal assets.
Directors can be pursued personally by shareholders, creditors, liquidators, employees, customers and enforcement bodies. A company can often pay its directors' costs, but not always: it may be insolvent, new owners may refuse after a takeover, or the claim may be brought by the company itself. The policy, often called D and O cover, fills those gaps.
Most policies have three parts. The first pays directors directly when the company cannot. The second reimburses the company when it pays on their behalf. The third, entity cover, protects the company itself and mainly matters to listed companies facing shareholder claims. Cover is claims made, usually with one limit shared by everyone insured.
Directors' and officers' insurance in brief
- Protects
- Directors, officers, senior managers and often their spouses or estates
- Typical claimants
- Shareholders, creditors, liquidators, employees and enforcement bodies
- Claims basis
- Claims made, with a limit shared by everyone insured
- Compulsory?
- No, though investors and non-executive directors often ask for it
- Priced on
- Financial strength, sector, size, ownership and overseas exposure
- Not covered
- Proven fraud, deliberate dishonesty and fines that cannot be insured
What directors' and officers' insurance covers
Cover follows the individual rather than the company's balance sheet. These are the sections and extensions found in most policies.
Personal liability of directors
Damages and settlements awarded against individual directors for breach of duty, negligence, error, misstatement or omission in their role.
Defence costs
Legal fees from the moment a claim is made, usually advanced as they are incurred rather than repaid once the case ends.
Investigations and inquiries
Representation when directors are formally investigated by enforcement bodies, tax authorities or health and safety inspectors, including interviews under caution.
Insolvency and creditor claims
Claims from liquidators and administrators alleging that directors kept trading when the company could not pay its debts.
Manslaughter defence costs
Defence of directors facing gross negligence manslaughter or health and safety charges after a fatal accident. Fines and sentences are not covered.
Company reimbursement
Repays the company for costs it has met on behalf of its directors, after any retention the company carries.
Disqualification proceedings
Legal costs of defending proceedings to disqualify someone from acting as a company director in future.
Outside directorships
Cover for your directors when they sit on the board of a charity, trade body or another company at your request.
Former directors
Retired directors remain insured for claims about decisions they made while in office, provided the policy stays in force.
Crisis and reputation costs
Many policies pay for public relations advice when a claim or investigation threatens a director's reputation.
Extensions and related covers
- Management liability: a package that adds employment practices, corporate and crime cover to directors' cover
- Professional indemnity: claims that the company's services or advice caused a client loss
- Crime and fidelity: theft and fraud by employees or outsiders, which directors' cover does not pay
- Commercial legal expenses: tax enquiries and contract disputes involving the company
- Key person cover: protecting the business financially if a director dies or is seriously ill
Which companies buy directors' and officers' insurance?
Any company with a board carries the exposure, but the push to buy cover usually comes from one of the following situations.
Looking for a combined package? Many private companies buy directors' cover inside a management liability policy. For sector covers, see insurance by industry.
- Companies with outside investors: private equity, venture capital and minority shareholders who can challenge board decisions
- Firms planning to borrow, sell or acquire: transactions bring disclosures and scrutiny from buyers, lenders and their advisers
- Businesses under financial pressure: directors' decisions are examined closely by creditors and insolvency practitioners when cash is tight
- Construction and contracting groups: site fatalities can lead to investigations of individual directors, and supply chain failures to creditor claims
- Manufacturing and engineering groups: health and safety, environmental and product decisions taken at board level
- Technology and AI companies: investor backed growth, data protection exposure and rapid hiring
- Healthcare and care providers: inspections, safeguarding concerns and patient safety decisions that reach the boardroom
- Transport and logistics operators: operator licence inquiries and fatal accident investigations involving directors
- Recruitment businesses: worker status, pay and tax compliance issues that land on directors
- Property companies: investors, lenders and joint venture partners with a stake in how assets are managed
- Charities and not for profit bodies: trustees face similar personal exposure, and cover is written along the same lines
How much does directors' and officers' insurance cost?
Underwriters assess how likely the board is to be pursued and how much a claim could cost. These factors carry the most weight.
Financial position
Recent accounts, profitability, debt and cash flow. Losses or thin net assets raise concern about insolvency claims.
Size and structure
Turnover, assets, the number of subsidiaries and whether any are overseas, which affects where claims can be brought.
Ownership
Companies owned by their own directors are rated more lightly than those with outside investors, debt funders or plans to list.
Sector
Closely scrutinised sectors such as healthcare, construction, technology and financial services attract more detailed questions.
North American exposure
Subsidiaries, shareholders or significant sales in the USA can raise the price considerably or narrow the cover.
Limit and retention
The size of the shared limit, and the retention the company bears on reimbursement claims, both shape the premium.
What directors' and officers' insurance does not cover
Exclusions are fewer than on most policies, but the following appear across the market.
- Fraud, dishonesty or deliberate breaches once proven or admitted, though defence costs are usually paid until then
- Personal profit or advantage the director was not entitled to
- Criminal fines and other penalties that cannot be insured
- Claims or circumstances known before the policy started, and earlier litigation
- Bodily injury and property damage claims, which belong under public liability and employers' liability, though manslaughter defence costs are usually included
- Errors in the services the company sells, which need professional indemnity insurance
- Pollution claims beyond limited defence costs, which need environmental liability cover
- Claims against the company itself, unless entity cover or management liability is in place
Directors' and officers' or professional indemnity?
Both cover allegations of getting things wrong, but they protect different people against different claimants.
| Feature | Directors' and officers' | Professional indemnity |
|---|---|---|
| Who is protected | Individual directors and managers, plus company reimbursement | The firm, for the services it provides |
| Typical claimant | Shareholders, creditors, liquidators, employees and enforcement bodies | Clients and third parties who relied on your work |
| What the claim alleges | Poor management decisions or breach of directors' duties | Negligent advice, design or service |
| Typical claim | A liquidator says the board kept trading while insolvent | A client says a flawed report cost them money |
| Investigation costs | Usually covered for directors | Usually limited to professional disciplinary hearings |
| Who needs it | Any company with a board | Firms selling advice, design or expertise |
How to arrange directors' and officers' insurance
Underwriters focus on the company's finances and governance. Having this ready shortens the process.
Share your latest accounts
Full accounts and recent management figures, with an explanation of any losses, covenant issues or refinancing.
Describe the group and ownership
Subsidiaries, overseas operations, shareholders and any investor or lender with board rights.
Flag transactions and changes
Planned acquisitions, sales, fundraising or restructuring, as these can change the cover and must be disclosed.
Disclose claims and investigations
Past or pending claims, inspections, tribunal matters or official inquiries involving the company or its directors.
Decide on limit and structure
Agree the shared limit, whether to add a separate limit for non-executive directors and how the retention applies.
Joining or reshaping your board?
Tell us about your company and its board and a specialist broker will compare directors' cover for you.
Get a quoteDirectors' and officers' insurance FAQs
How much does directors' and officers' insurance cost?
It depends on the company's financial health, size, ownership, sector and exposure to North America, as well as the limit chosen. A profitable, owner-managed company with no overseas subsidiaries will pay far less than an investor-backed business making losses. A broker can explain what underwriters will focus on.
Do private limited companies need directors' and officers' insurance?
It is not compulsory, but the exposure exists whatever the company's size. Directors of private companies can be, and are, pursued by liquidators, employees, investors and enforcement bodies. Many private companies buy it as part of a management liability package.
Doesn't limited liability already protect directors?
Limited liability protects shareholders from the company's debts. It does not stop directors being pursued personally for their own conduct, such as breach of duty, trading while insolvent or failings in health and safety. Those claims can reach personal assets, which is what the policy protects.
Can the company pay a director's legal costs instead?
Often, but not always. There are limits on what a company can pay on a director's behalf, an insolvent company may not be able to pay at all, and new owners may refuse after a takeover. The policy pays the director directly in those situations.
Does directors' and officers' insurance cover former directors?
Yes. Former directors remain covered for claims about decisions made while they were in office, as long as the company keeps the policy in force. If the company is sold or stops trading, run-off cover keeps that protection in place for an agreed period.
Does the policy cover health and safety investigations?
Most policies pay legal costs for directors interviewed or prosecuted after a serious workplace incident, including defence of manslaughter charges. Fines and custodial sentences cannot be insured. It is worth checking the investigation cover in detail, as it varies between insurers.
Are non-executive directors covered?
Yes, non-executive directors are normally insured persons. Many ask for an additional limit reserved for them, so that claims against executive directors cannot use up the cover they rely on. This is a common request from independent and investor-appointed directors.
What happens to the cover when a company is sold?
Most policies stop covering new decisions at the point of sale, while past decisions stay covered under a run-off arrangement. Agreeing run-off before completion protects the outgoing board, and buyers often make it part of the deal.
How do I get a directors' and officers' insurance quote?
Ask for one through this page and a broker who places directors' cover will arrange a call. Have your latest accounts, group structure, ownership details and any past claims or investigations ready, so underwriters can be approached straight away.
Protect your board with the right cover
Personal protection for directors and senior managers, set at a limit that reflects the company's size, finances and plans.