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Business Insurance

Directors’ and Officers’ Liability Insurance

Recent legal and regulatory reform in Hong Kong has significantly increased the risks and liabilities faced by company directors and officers in this jurisdiction. Directors and officers may be personally liable to any party who has an interest in the company, and they can be sued in their individual names. A breach of duty exposes the individual director’s or officer’s personal assets (and even assets in their spouse’s names) to claims that, when combined with the doctrine of joint and several liability amongst the board members, could mean paying out these assets for the liability of the entire board.

Who is insured?

The policy protects the directors and officers of the parent company and its subsidiaries, including all past and present directors and officers and those appointed during the currency of the policy, and also the company when it reimburses its directors and officers.

What is covered?

Defense costs, damages, judgments, settlements, civil fines and penalties resulting from a claim arising out of actual or alleged acts, errors, omissions, misstatements, neglect, or breaches of duty committed or allegedly committed by a director or officer are covered with D&O liability insurance.

Key Protection provided by a D&O policy includes the following key extensions:

  • Worldwide Coverage

  • Advancement of defense Costs

  • Investigation Costs

A D&O policy is also designed to provide automatic coverage to directors and officers for liabilities which may arise out of the following:

  • Acquisition of a New Subsidiary

  • Offering of Securities

  • Merger or Acquisition

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Licensed Insurance Intermediary Lic. No. FB1152.