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D&O Insurance:
Protection for Executives and Board Members

Benefits of D&O Insurance

Directors & Officers (D&O) Insurance is now an indispensable part of any corporate insurance portfolio. It protects the personal assets of corporate officers such as managing directors, board members, supervisory board members, and other executives from liability claims arising from breaches of duty in the course of their professional responsibilities.


Personal Liability and Executive Risk

Decision-makers are personally and jointly liable—with their entire private assets—for any errors made in the course of their duties. Liability for corporate executives is particularly strict in Germany and can lead to significant financial consequences. Missteps in areas such as risk management, legal compliance, or poor strategic planning can quickly trigger substantial claims for damages.

The risk is particularly high during crisis situations, such as corporate insolvencies or major restructuring efforts. Even financially stable companies can face unexpected challenges during economically difficult times—e.g., during pandemics or geopolitical conflicts. D&O insurance helps executives make bold and necessary decisions without fear of personal financial liability, thus contributing to the company’s overall stability and resilience in a dynamic, competitive environment.


Internal and External Liability

Executives may be held liable not only by third parties such as customers or creditors (external liability), but also by their own company (internal liability). This means the company itself can file claims against its executives if their actions result in financial harm to the organization.

Cost Coverage and Legal Defense

In addition to covering justified claims for damages, D&O insurance also includes legal defense costs—such as attorney fees and court expenses—if an insured person is accused of misconduct. It offers protection both for damage compensation and legal representation.


A Critical Component of Corporate Risk Management

D&O insurance is a key pillar of a company’s risk management strategy. It empowers executives to make informed decisions without fear of personal financial repercussions. At the same time, it boosts internal confidence and enables more decisive and forward-thinking leadership. It also protects the company from financially significant claims that may arise from executive decisions—claims that might otherwise exceed a manager’s personal financial capacity.

Importantly, D&O insurance protects the individual, not the company itself. It ensures that executives can act decisively—as long as their actions are not grossly negligent or intentional.

E&O Insurance

E&O Insurance

Comprehensive Protection for Financial Service Providers

Errors & Omissions (E&O) Insurance is a specialized professional indemnity insurance designed for the financial sector. It protects companies, subsidiaries, and employees from financial losses caused by errors, negligence, or omissions in the provision of professional services.

E&O insurance covers specific risks such as:

  • Faulty or negligent advice
  • Liability for prospectuses
  • Violations of regulatory obligations

Coverage is tailored to the company’s specific business activities and offers broad protection for a wide range of financial institutions—including banks, insurers, asset managers, and private equity firms.

For companies operating in the financial sector, E&O insurance is essential to guard against liability claims and ensure long-term financial stability.

FAQs about
D&O Insurance