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Directors & Officers Liability

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Protect your company from legal risks and exposures from the directors.

Many small business owners in Australia set up companies for tax efficiency, asset protection, or to separate personal and business finances. But what’s often overlooked is the legal responsibility that comes with being listed as a company director. Even in a company of one or two people, directors and officers can be held personally liable for decisions they make in the course of business. If a shareholder, regulator, employee, or creditor alleges misconduct or mismanagement, the consequences can be costly and reputationally damaging.

Directors and Officers (D&O) Liability Insurance provides a critical layer of protection by covering the legal defence costs, investigation expenses, and settlements that arise from such claims. It is not just for big corporations, small and medium-sized businesses, family companies, and not-for-profit organisations are often just as exposed, especially in industries with regulatory oversight or external investors.

At Bluewell we help Australian businesses build tailored D&O cover that matches their structure, risk profile, and budget. Our brokers can review your situation and recommend solutions.

Public Liability Insurance

Key Features

  • Covers directors, officers, board members, and key executives
  • Protection for legal defence costs related to wrongful act allegations
  • Includes investigation expenses and civil penalties (where legally permitted)
  • Options to extend cover to the company for securities-related claims
  • Includes run-off cover for former directors
  • Available for private, public, and not-for-profit organisations

What’s Covered?

D&O Insurance typically responds to claims or investigations arising from:

  • Breaches of directors’ duties under the Corporations Act
  • Misleading statements or errors in financial reporting
  • Failure to act in the best interest of shareholders or stakeholders
  • Unfair dismissal or employment practice allegations
  • Defamation or reputational harm caused in a corporate capacity
  • Regulatory or government investigations (such as ASIC inquiries)
  • Insolvent trading allegations
  • Misuse of confidential information or insider knowledge

How D&O Insurance Protects You

This cover helps shield directors and officers from the personal financial impact of legal claims made against them. It ensures:

Legal costs are covered from day one of a claim or investigation

Directors do not need to rely on personal assets or savings

Companies can meet their indemnity obligations without draining cash flow

Reputational harm is mitigated with professional claims handling

The business remains attractive to board members and investors

Ongoing cover is available for past directors (typically for up to seven years)

Potential Claims

A sole director is investigated for an alleged breach of the Corporations Act

An employee sues over unfair dismissal and names the HR manager and director in the claim

A client claims financial loss due to misstatements made by senior management

A not-for-profit board faces an inquiry for mismanaging donor funds

Creditors bring action against directors for continuing to trade while insolvent

Regulatory fines issued after an ASIC investigation into misleading conduct

Frequently Asked Questions

Yes. Many small businesses operate as private companies, and their directors carry legal responsibilities under the Corporations Act. Claims can still arise from employees, creditors, or regulators even if the company has only one or two people involved.

D&O Insurance protects directors and officers from claims related to their role. Management Liability Insurance is broader and includes coverage for employment practices, crime, and statutory liability at the company level. The two products are often packaged together.

Most policies offer run-off cover that protects former directors for a set period, usually up to seven years. This ensures you remain protected from claims that arise after your tenure but relate to past decisions.

Yes. Policies typically cover the cost of responding to investigations by regulators like ASIC, including legal representation, document review, and associated costs.

Yes. Without D&O cover, directors may be personally liable for legal defence and any damages awarded. This puts personal savings, property, and other assets at risk if indemnity is not available from the company or is insufficient.

Premiums are based on company size, revenue, number of directors, industry risk level, claims history, and the amount of cover selected. Our brokers can obtain competitive quotes from leading insurers to suit your needs.

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