Director Insurance in South Africa: What Directors & Officers Cover Is For

What director insurance means

Directors and officers (D&O) liability insurance is designed to respond to certain claims made against directors or officers arising from alleged wrongful acts in their management role. It is different from general business liability, professional indemnity and personal life/disability cover.

Why a small-company director should at least understand it

Using a private company can separate the company from its owners, but it does not make every director action risk-free. Directors still have statutory and fiduciary responsibilities, and CIPC notes that active directors may remain liable for actions taken during their tenure in relevant circumstances.

What to ask an insurer or broker

• Who is insured: directors, prescribed officers and the company?
• Which claims, defence costs and investigations are covered?
• What exclusions apply to fraud, dishonesty, prior matters, tax or regulatory penalties?
• Is cover claims-made, and what is the retroactive date?
• What happens when a director leaves?

BXE role

BXE can help organise company records, reminders and customer operations. Insurance placement and advice should come from an appropriately authorised insurer/intermediary.