Does your organisation have Directors’ & Officers’ Liability Insurance?
Most companies have the power to indemnify their directors and officers against the liabilities they may incur arising from the activities of the company. This power is usually found in the company’s constitution. Companies also have the power to take out insurance to support that indemnity; this is called directors’ and officers’ liability insurance (“DOLI”).
The Companies Act places some limits on the extent of that indemnity. It cannot extend to cover fines or regulatory penalties, or the cost of defending criminal proceedings if the director or officer is convicted.
Even with those exclusions the indemnity and the insurance still provide useful cover and some comfort at least for the directors and officers in carrying out their duties.