Directors & Officers Liability Insurance

Directors & Officers (D&O) Liability Insurance protects the personal assets of company directors, officers, and executives if they are personally named in a lawsuit arising from their management decisions. These claims often arise from allegations of mismanagement, breach of fiduciary duty, regulatory non-compliance, or employment-related decisions.

Even when leaders act in good faith, legal action can still occur. D&O insurance helps cover legal defence costs, settlements, and judgments.

D&O policies are designed to protect both individuals and the organization itself. Coverage typically includes:

Professional Liability Insurance is designed to protect against claims arising from your professional services, including:

Legal defence costs: Lawyer fees, court costs, and related expenses.
Claims of mismanagement: Allegations involving poor strategic decisions, misuse of funds, or failure to act
Breach of fiduciary duty: Claims that directors or officers failed to act in the best interests of stakeholders
Employment practices claims: Wrongful dismissal, discrimination, harassment, or retaliation allegations
Regulatory and compliance investigations: Coverage for defence costs arising from government or regulatory actions
Shareholder or stakeholder lawsuits: Claims brought by shareholders, investors, members, or creditors

Coverage generally applies to past, present, and future directors and officers, subject to policy terms.

Who Should Have Directors & Officers Liability Insurance?

D&O insurance is essential for any organization with decision makers who could be held personally accountable, including:

Private and public corporations
Non-profits and charities
Boards of directors
Startups and growing companies
Professional associations
Condominium corporations
Indigenous organizations and councils
In Saskatchewan, D&O claims commonly arise from employment disputes, governance issues, financial decisions, and regulatory scrutiny.
If your organization has a board, executive team, or senior leadership, D&O insurance should be considered foundational coverage.

Directors & Officers Liability Insurance FAQs

What is the difference between D&O insurance and general liability insurance?

General liability insurance covers bodily injury and property damage. D&O insurance covers management decisions and leadership actions, including lawsuits that name individuals personally.

Can directors be sued personally?

Yes. Directors and officers can be held personally liable, even if they acted in good faith. D&O insurance helps protect personal assets such as savings, homes, and investments.

Is D&O insurance required by law in Saskatchewan?

It is not legally required, but many organizations require it contractually, and it is strongly recommended for risk management and board recruitment.

Does D&O insurance cover employment related claims?

Yes, many policies include or can be extended to include employment practices liability, one of the most common sources of claims.

How much D&O coverage do we need?

Coverage limits depend on:

Organization size and revenue
Number of directors and officers
Industry risk
Regulatory exposure

Cooke Insurance can help assess appropriate limits for your organization.