Directors and officers insurance – Recent critical issues in Australia and New Zealand

Directors and Officers Liability Insurance (“D&O insurance”) has grown and evolved rapidly over the past 80 years to assume an important position in most corporations’ corporate governance and risk management strategies. This article focuses upon certain topical matters of particular concern to directors and officers including the availability of defence costs where a D&O policy is subject to a statutory charge; the commercial desirability of stand-alone “A-side” coverage, being the cover provided directly to directors and officers for loss resulting from claims made against them for wrongful acts; the impact of fraud and/or dishonesty upon D&O cover; and disclosure of the nature and extent of D&O cover to the directors and officers themselves and to third parties – in the latter case such access frequently being necessary to determine the economic viability of pursuing a proposed action against a company and its directors and officers.