What is Directors and Officers Insurance?

Directors and Officers (D&O) Insurance covers claims resulting from business decisions and actions taken by company managers as part of their job duties. An organisation's officers typically include key executives and managers, but not all employees. Policies cover defence costs and damages arising out of wrongful act allegations and lawsuits brought against an organisation's directors and/or officers.

One common claim is that of wrongful employment practices. This can include complaints of discrimination, wrongful termination and hostile workplace conditions.

Directors and Officers Insurance coverage is necessary to enable managers to make decisions without having to worry about personal liability. Directors and Officers coverage allows managers to settle claims quickly and discreetly.

Contact us for policy quotation, comparison and unbiased advice now!

Does my business need Directors and Officers Insurance?
What does it cover?
How much does it cost?
What’s the difference between D&O and PI Insurance?

Does my business need Directors and Officers Insurance?

Directors and Officers (D&O) Insurance is not a legal requirement. However, many companies now purchase it as part of their risk management strategy. Managers can make mistakes and will often be held liable. Management and executives sometimes make tough decisions, often based on uncertain information, which then can have a huge impact on the business and outside world. No matter how careful or experienced they are, any manager's actions and decisions can possibly result in losses for an organisation or a third party, which can lead to costly litigation. D&O Insurance makes the risk that comes with managerial decision-making manageable and transparent, ensuring that a company's management has room to make such decisions.

Today's increasingly complex legal environment means businesses face a heightened prospect of liabilities and litigations, often driven by “adverse news events”. Companies usually purchase D&O Insurance for financial protection because lawsuits are expensive, and the costs associated with them are rising. Moreover, if companies do not have a good D&O Insurance programme in place it is unlikely that they will be able to attract top managerial talent, given the potential risks involved.

What does Directors and Officers Insurance cover?

D&O Insurance covers:

  • Directors and Officers liability
  • Company reimbursement
  • Entity securities
  • Breach of fiduciary duty lawsuits
  • Breach of contract lawsuits
  • Shareholder oppression lawsuits
  • Negligence lawsuits
  • Defamation lawsuits
  • Employment practices liability lawsuits

D&O Insurance does not cover:

  • Fraud
  • Intentional criminal acts
  • Illegal remuneration or personal profit
  • Claims made under a previous policy
  • Uninsurable fines and penalties

How much does Directors and Officers Insurance cost?

The premium for D&O Insurance is calculated based on the estimated claims frequency and severity. There are several risk factors that affect pricing, including:

  • The size of the company
  • Domestic and international activity
  • History of past claims
  • Industry sector
  • Mergers and acquisitions activity
  • Professional backgrounds
  • Profit
  • Debts

What's the difference between Directors and Officers Liability Insurance and Professional Indemnity Insurance?

Professional Indemnity policies protect your company from professional negligence, errors and omissions. Directors and Officers Liability policies protect the Directors or Officers from wrongful acts committed.


You run a business strategy consultancy firm. An employee makes a series of poor strategy recommendations, causing massive losses for your clients. In this case, your clients could file two separate lawsuits against you:

  1. Your company gets sued for professional negligence. Only a Professional Indemnity policy will cover this.
  2. You get sued as a Director/Officer of your company for breach of fiduciary duty. Only a Directors and Officers Liability policy will cover this.

It’s therefore important to combine both a Professional Indemnity policy and Directors and Officers Liability policy for maximum coverage.

Frequently Asked Questions

About Directors And Officers Liability Insurance In Singapore

  • Directors and Officers (D&O) insurance isn't compulsory in Singapore, but investors may require your company to purchase this insurance policy to protect their investments from liabilities arising from wrongful acts.
  • No, D&O insurance protects the company and its directors from legal liabilities. Meanwhile, key person or keyman insurance policies cover the business against loss if key executives can no longer serve the company (e.g. in the event of the executive/s death).
  • Yes. A startup can benefit from D&O insurance, as it protects executives and high-level decision-makers against potential lawsuits while running the company. Aside from these, having insurance coverage also helps startups attract talents, secure funding, or go public in the future.
  • Ideally, you'll need D&O liability insurance if you're a board member or serving on a board. Insurance coverage protects you from lawsuits from employees, investors, regulators, vendors, etc
  • Yes. Management liability insurance policies can include D&O and the following:
    • Employment Practises Liability Insurance (EPL)
    • Fiduciary Liability Insurance
    • Crime Insurance

Related Articles


Contact us for policy quotation,
comparison and unbiased advice now!