Directors & Officers (D&O) Insurance in Thailand

What is Directors & Officers (D&O) Insurance?

Directors & Officers (D&O) Insurance in Thailand protects your company through indemnification should your directors and officers be found liable for legal misconduct, errors, and allegations.

Asia has been experiencing a substantial rise in pricing and renewal rates for directors and officers liability insurance, alongside increasingly limited coverage terms. The trend is driven by evolving exposures to people risks (such as employment lawsuits), M&A risks, rising insolvencies, as well as an increase in litigation and claims in the region and globally.

There has also been an increase in liability suits filed by the company against individual directors & officers. These suits are often “event-driven” as a result of the failure of senior directors & officers to adequately respond to high-profile events and trends. Such events include cyberattacks, climate change, and allegations of misconduct.

In some cases, a company’s senior company leaders could find themselves having to pay a significant portion of settlement and legal costs out-of-pocket.

With companies facing growing scrutiny on every aspect of their businesses from regulators, investors, shareholders, customers, and employees alike,

Directors & Officers (D&O) Insurance can offer organizations and their senior leaders comprehensive and cost-efficient coverage against unexpected claims and litigation.

How does Directors & Officers (D&O) Insurance work?

Directors and Officers (D&O) Insurance is a type of liability insurance that provides financial protection for individuals serving as directors, officers, or leaders of a company.

Here’s how Directors & Officers (D&O) Insurance works

Protection for Individuals – Director & Officers Insurance is designed to protect individual directors and officers (and sometimes the company itself) from personal financial losses in the event they are personally sued for alleged wrongful acts while managing the company.

Coverage for Legal Costs – Directors & Officers Insurance covers the legal costs associated with defending against lawsuits, investigations, or legal proceedings. This includes attorney fees, court costs, and settlements or judgments.

Wrongful Acts Coverage – The policy typically covers a range of “wrongful acts,” which may include alleged errors in judgment, breaches of fiduciary duty, negligence, misleading statements, and other actions that may lead to legal action against company leadership.

Company Reimbursement – In some cases, the company may reimburse its directors and officers for legal costs, but Directors & Officers Insurance provides an extra layer of protection and helps preserve corporate assets.

Protection Against Personal Assets – Directors & Officers Insurance helps protect the personal assets of directors and officers, such as their homes, savings, and other investments, in case they are personally held liable in a lawsuit.

Entity Coverage – Directors & Officers (D&O) Insurance may also include coverage for the company itself (entity coverage) in certain situations, providing protection for the organization’s assets.

Policy Limits – Like other insurance policies, Directors & Officers (D&O) Insurance has coverage limits. It’s crucial for companies to choose coverage limits that align with their potential risks and exposures.

Exclusions – Directors & Officers (D&O) Insurance policies may have exclusions, such as intentional illegal acts, fraud, or claims related to bodily injury or property damage. Understanding these exclusions is important for assessing the scope of coverage.

Claims-Made Basis – Directors & Officers (D&O) Insurance is typically written on a claims-made basis, meaning it covers claims made during the policy period, regardless of when the alleged wrongful act occurred. Continuous coverage is important to ensure protection for past acts.

Directors & Officers (D&O) Insurance is essential for attracting and retaining qualified individuals to serve on a company’s board or in executive positions. It helps mitigate the personal risks associated with leadership roles and provides financial security in the face of legal challenges.

To accurately assess risk exposure and obtain a cost-competitive rate with sufficient coverage and protection, contact our team of experts for friendly helpful advice on what type of policies your company requires.