In business today the role of a company director or officer carries significant responsibilities as well as rewards.

Directors and officers have an increased number of legal and administrative duties and there is a greater expectation among shareholders, creditors, customers, the judiciary and the general community that these duties should not be breached.

Directors and officers have duties and obligations, for which they are personally responsible, some of which may carry unlimited personal liability. Such liability can be incurred, not only as a result of their own activities, but also from the activities of fellow directors.

Many companies indemnify their directors and officers through their constitution. When indemnifying a director, a company may incur liabilities that have a severe impact on its bottom line. A Directors' and Officers' Liability policy will address the concerns and liabilities of both the director, and the company when indemnifying the director.

Directors' and Officers' Liability insurance provides cover for:

• Judgments
• Settlements
• Investigative costs
• Defence costs
• Costs to appear at inquiries or investigations

An appropriate insurance portfolio, which includes Directors' and Officers' Liability insurance cover, should form part of a comprehensive risk management program designed to provide protection against the exposures the company and its directors and officers face.