Professional Liability Insurance for Directors and Officers

Directors' and officers' liability insurance is a type of professional liability insurance aimed at the directors and officers of a company. Directors, officers, corporate officers and other decision-makers have increased responsibilities to investors, the public, regulators and the company's employees. Thus, if something goes wrong, such as omissions, poor management decisions, inaccuracies or breach of duty, these individuals can be held liable. If they are insured with comprehensive directors and officers insurance, they will not have to pay out of pocket legal fees and third-party compensation for covered events as compensation for losses or advance expenses if an insured suffers such a loss as a result of a lawsuit for alleged illegal acts in their capacity as directors and officers. This coverage may also extend to defense costs arising from criminal and regulatory investigations or litigation. In fact, civil and criminal actions are often brought against directors and officers simultaneously. Intentional wrongful acts, however, are not covered by directors and officers insurance policies.

Insurance for directors and officers is not compulsory in Cyprus. However, insurance is necessary as these professionals can be sued for illegal acts, negligence or malpractice. Coverage can be extended to include defense costs from regulatory or criminal investigations or lawsuits.

Even though D&O Liability Insurance is not required for all businesses, corporations with a board of directors could be protected from significant costs if someone raises legal claims against their directors or officers.