In an increasingly litigious world, your company’s board of directors and officers are personally at risk to incur financially crippling lawsuits, making it difficult to attract top-tier talent.

Directors & Officers Liability

Directors and Officers liability insurance is designed to protect directors, officers and employees involved in the management of a company from personal loss resulting from legal claims made against them in the course of undertaking their duties on behalf of the company. Whether you are a director and wanting protection, or a company looking to protect your board and managers and the company’s balance sheet, Aon can assist.

Invaluable Protection of Your Personal Assets and the Company’s Balance Sheet

Stand alone Directors and Officers Liability Insurance Policy

Directors and Officers Liability Insurance policies consist of two sections:
Insuring Clause A - Directors and Officers Liability

This section responds to claims made against the directors, officers and employees for Wrongful Acts, where they are not entitled to an indemnity from the company, so you do not individually have to fund your defence and settlement.

Insuring Clause B - Company Reimbursement

This section responds to claims where the company is entitled to give an indemnity to the directors, officers and employees for their Wrongful Acts. Having given the indemnity to the directors, officers and employees, the company looks to this part of the policy for reimbursement for the amount of the indemnity given to ensure that the company’s balance sheet is not impacted.

Policy Design

Aon will help you design and implement a Directors and Officers or Management liability insurance policy that fits with your insurance requirements.

Hot Topics

In addition to protecting your company from loss of money, securities, inventory or other property resulting from fraud events perpetrated by employees or third parties, Crime Insurance policies can be extended to provide protection from loss arising from paying a “fake invoice”.

Cyber Security

Cyber security (data breaches) continues to be a main topic of discussion for directors and officers due to high profile incidents overseas (Wanna Cry, Equifax, Reddit, Under Armour/MyFitnessPal) but there should also be the awareness of multiple ransomware cases in New Zealand and Australia. Ransomware is a type of malware which restricts access to the computer system that it infects, and demands a ransom paid to the creator(s) of the malware in order for the restriction to be removed. This type of security breach interrupts the running of their business and can cause loss to the company and its shareholders.

Whilst New Zealand does not yet have the regulatory oversight which exists in the United States, Australia, United Kingdom and other countries, New Zealand directors and officers need to ensure that cyber security is included in their risk registry and the appropriate processes and procedures are put in place to ensure that they have a defence to any claims brought against them by shareholders or other parties.

Health & Safety at Work Act 2015

Health & Safety at Work Act 2015 came into effect on 4 April 2016 and creates a due diligence duty so that those in governance roles (directors and officers) must proactively manage workplace health and safety. Directors and officers will be required to exercise due diligence to ensure that the PCBU complies with its duties. Failure to comply with a due diligence duty could result in prosecution and a fine, the maximum level of which would be determined by whether or not the officer’s failure exposed a person to a risk of death or serious injury or illness.

Steigrad Ruling

Due to the implications of the Steigrad Ruling 2013, Aon has reviewed and negotiated policy amendments to ensure that your Insurer can advance defence costs in the event that a section 9 charge under the Law Reform Act has been applied to your policy.

Aon's Directors and Officers and Management Liability insurance fills your risk gaps. Contact us today for more information or to discuss tailoring a solution for you and your organisation.

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This website contains general information only and does not take into account your individual needs or financial situation. It is important to note that limits, excesses, terms and conditions and exclusions apply to the products and services outlined on this website. Please refer to the relevant policy documents for details of cover, the provision of which is subject to the insurer’s underwriting criteria that apply at the time. Please contact us if you have any questions.