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Directors' and Officers' Liability Insurance (D&O)
In the current business context, highly competitive and regulated, directors and administrators make decisions in an environment exposed to increasing legal complexity.
In short
What is D&O insurance
D&O insurance protects the personal assets of directors, officers, and executives against claims arising from their management decisions. It is necessary because the director's liability is personal and unlimited: they are liable with all their present and future assets, and this liability survives their departure during the limitation periods, which in the corporate sphere reach four years from departure.
Advantages
Advantages of D&O insurance
The D&O protects an estate that is not the company's, but the personal one of the decision-maker.
Your home remains out of reach
The D&O places the insurer's estate between the claim and your assets. Without that barrier, the decision-maker in the company ends up responding with their home and savings.
You can decide without paralysis
A board that fears personal liability avoids uncomfortable and necessary decisions. The cover restores governance capacity to those who must exercise it.
You attract independent directors
No competent professional joins a board today without D&O in force. It is a prerequisite to incorporate the external profile that provides judgement to the body.
Deductible premium and tax-free
The cost is borne by the company with full deductibility and without the director being taxed for it in their IRPF. Personal protection financed by the company, without a tax toll.
Profile
Who we work for
Boards of directors
Collegiate bodies in which each member is jointly liable for the agreements adopted.
SME and family business directors
The most exposed and poorly covered profile, especially against claims for social debts.
Independent and proprietary directors
Profiles that assume responsibility for decisions where their capacity for information is limited.
Directors with powers
Proxies and senior management whose decisions commit the company and their own assets.
Technical criteria
Where claims come from
The image of D&O as a cover for large listed companies is misleading: the majority of claims we manage are against directors of medium-sized companies.
Fraudulent bankruptcy
This is the most common route. The director is liable for the insolvency deficit with their personal assets if the insolvency is found to be aggravated.
Debts with the Administration
Transfer of liability for tax and Social Security debts, with procedures that act directly on personal assets.
Conflicts between partners
Challenging agreements and social responsibility actions in family businesses and companies with minority shareholders.
Claims after resignation
The director who resigns remains exposed for years for acts during their mandate, without a policy if no one contracted the discovery period.
Scope
Main covers of D&O insurance
- Compensation charged to the director for damages arising from management acts
- Legal, criminal, and administrative defence expenses, advanced during the procedure
- Civil and criminal bonds, and costs of providing guarantees
- Claims from partners, creditors, employees, third parties, and the company itself
- Cover for de facto directors and group subsidiaries
- Discovery period for those who leave office
The definitive scope depends on the wording of each insurer. We review it with you before recommending anything.
The JORI& method
Cómo trabajamos
El mismo método en cualquier solución: entender la exposición real antes de mirar una prima.
Análisis del riesgo
Estudiamos la actividad, el patrimonio y los escenarios plausibles. Sin ese diagnóstico, comparar pólizas es comparar precios de cosas distintas.
Diseño del programa
Definimos coberturas, límites, franquicias y exclusiones aceptables. Decidimos qué se transfiere al asegurador y qué se retiene de forma consciente.
Negociación con el mercado
Presentamos el riesgo a las aseguradoras con las que trabajamos y negociamos condiciones. Somos independientes: no pertenecemos a ninguna compañía.
Acompañamiento y siniestros
Revisamos el programa cada renovación y, cuando ocurre el siniestro, actuamos como tu parte técnica frente al asegurador hasta el cobro.
Frequent doubts
Lo que más nos preguntan sobre D&O insurance
Does a SME need D&O or is it for large companies?
A SME especially needs it. In large companies, the director usually has asset backing and corporate cover; in SMEs, the director is often the partner, and their personal and family assets are directly in the line of fire, especially in an insolvency scenario.
Does D&O cover the director if the company goes into insolvency?
Yes, and it is its most relevant scenario. It covers the defence in the qualification section and the obligation to cover the insolvency deficit if the insolvency is declared fraudulent, unless there is a declared intent in a final judgement.
Who pays the policy, the company or the director?
The company pays it and it is a deductible expense. Since 2011, the D&O premium is not considered a benefit in kind for the director as long as the policy covers liability arising from the position and not a particular interest.
What happens if I leave the position?
You remain exposed for acts during your mandate during the limitation periods. As the policy operates on a claims-made basis, it is essential to contract a discovery period, usually of six years, when you resign or when the company decides not to renew.
Does it cover debts with the Tax Office and Social Security?
It covers legal defence against the procedure of transfer of liability, which is where the matter is contested. The tax debt itself, as an obligation of the company, and penalties are not insurable.
And if the claim comes from my own partner?
It is covered if the policy includes the social responsibility action and does not have a majority partner exclusion. It is one of the clauses we always review in family businesses, because corporate conflict is the most common source of claims in that profile.
D&O
The D&O that supports a claim, clause by clause
We review your current D&O or design one from scratch, paying attention to the clauses that determine if you get paid: change of control, derivative action, and discovery period.
- Independent broker: we do not belong to any insurer
- The specialist in the field you consulted answers you
- The review is delivered in writing, policy by policy
Insights
Ver el tema corporate governance What we have written about this
Análisis
The administrator is liable with their assets: five scenarios we see each year
The claim against the administrator is not a matter for large listed companies. Most of the cases we manage are against medium-sized and family businesses.
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Sustainability reporting: why it ends up on the D&O's desk
When non-financial information becomes mandatory, audited, and published, it becomes a statement of the board. And statements are subject to claims.
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