Directors and Officers insurance: who is it for and what does it do?

February 11, 2026

If you take on the job of a director or the officer of a company, do you know that you may be held personally liable for any errors or mistakes you make while acting on behalf of the enterprise?

As we outlined in a previous blog, taking on the role of a director or officer of a company in the UK can be a risky business. Director and Officers (D&O) insurance exists to help protect you against those risks. So, let’s take a closer look at who D&O insurance is aimed at and what it does …

Who is D&O insurance for?

At its simplest, D&O insurance is for business directors and officers. So, who are these people for whom the insurance offers protection – indemnity in the event of claims made against them for business decisions made on behalf of the company?

The list is extensive to ensure breadth of cover. The “insured persons” cited in the typical Directors and Officers insurance policy may typically include not only the current directors and officers of the company but also those who have already left and those who might be appointed in future. Depending on the particular policy in question, this might include:

• both executive and non-executive directors of the company;

• the Chief Executive or Executives (CEOs), along with others in the so-called “C-suite” (CFO, COO, CTO, and so on);

• senior managers with company-level decision-making powers;

• partners in Limited Liability Partnerships; and

• trustees of non-profit, charitable organisations and pension funds.

What does Directors and Officers insurance do?

D&O insurance may help protect directors and officers of a company from personal financial loss.

Without that indemnity, directors and officers may be held legally liable for claims brought against them alleging “wrongful acts” committed while working for the company. Without the insurance cover, a director or officer’s personal property and savings could be at risk to pay for any legal defence of the claims or sums awarded in compensation.

According to the Companies Act 2006, those wrongful acts include – but are not necessarily limited to:

• negligence;

• errors;

• misleading statements; or

• breaches of duty or trust.

Allegations of wrongdoing may be made by a long list of potential claimants, including shareholders and investors, employees, industry regulators, creditors, competitors, customers, and other third parties.

The precise cover offered by D&O insurance may vary from one provider to another, and policy terms, conditions and claim limits apply, although typical headings include:

• legal costs: in the defence of allegations of wrongful acts (even where such claims are unfounded);

• indemnity: reimbursement of sums agreed in settlement of a claim or any compensation awarded by the courts;

• cost of investigations: costs involved in the defence of investigations by the likes of the Financial Conduct Authority (FCA) or HM Revenue and Customs or even criminal investigations by the Serious Fraud Office;

• protection in insolvency: defences against claims of wrongful trading.

Armed with Directors and Officers insurance, a company can attract and retain the talent it needs because its top management feels safe from liability; the company’s finances are safeguarded from the need to support directors or officers accused of wrongful acts; and even the past acts of those who are no longer with the company also typically may remain protected from liability.

With their decisions and actions on behalf of the company protected in this way, D&O insurance allows your directors and officers to do their jobs actively and with reassurance.

Get a quote for D&O insurance

Directors and Officers insurance may play an important role in helping to protect not only directors and senior management but also the wider business against the financial impact of certain claims and allegations – subject to the terms and conditions of the policy.

If you would like to find out more about D&O insurance, how it may complement your existing arrangements, or to request a Directors and Officers insurance quote, please contact us here at Alan Blunden or call us on 01702 826060.

Further reading: What is Director and Officers Insurance?