Directors and officers (D&O)
Those who make the decisions are liable with their own assets.
- Personal assets
- Protected
- After ceasing practice
- Covered
- Defence
- From day one
Liability in office is personal.
Directors are personally liable for their decisions, and that liability does not end when they leave office. A D&O policy protects your personal assets against claims from shareholders, creditors, employees or public authorities, and pays for your defence from day one.
Where a claim lands
Without a policy, legal defence costs and any compensation are paid out of the director's personal assets, even after leaving office.With a D&O policy, the insurer takes on your defence from day one and any compensation you are ordered to pay, within the terms of cover.
Ley de Sociedades de Capital (Spanish Companies Act), sections 236 to 241 bis
- Liability
- Joint and several
- Limitation period
- Four years
The directors are liable, with their own assets.
Directors are liable to the company, its shareholders and its creditors for any loss caused by acts contrary to the law, the articles of association or the duties of their office.
Liability is joint and several among the members of the board, and the claim becomes time-barred after four years (art. 241 bis LSC, the Spanish Companies Act).
- Applies equally to SMEs and large companies
- Extends to de facto directors
- Continues after leaving office
When a claim arrives.
-
Shareholders
A minority shareholder challenges a transaction and claims damages from the board.
How the policy responds
Legal defence for the board members and, where applicable, any compensation they are ordered to pay.
-
Creditors
In insolvency proceedings, the director is held liable.
How the policy responds
Defence costs in the insolvency classification proceedings and protection of personal assets.
-
Tax authorities
The tax authority transfers a tax debt to the director.
How the policy responds
Defence in the liability transfer proceedings, subject to the policy terms.
What is covered and what is not.
The policy protects the people who make decisions in the company, with the following cover:
- The director's personal assets
- Legal defence and legal costs
- Claims by shareholders, creditors and employees
- Inspections and sanction proceedings
- Cover after leaving office
- Board members, executives and attorneys-in-fact
Covers
- Legal defence from the moment of the claim
- Compensation payable by the director
- Civil and criminal bail bonds
- Claims after leaving office
Not covered
- Wilful misconduct established by a court ruling
- Fines and penalties that are uninsurable by law
- Unlawful personal gain
- Circumstances known before inception
What people ask us.
Is it only for large companies?
No. It matters most in SMEs, because directors usually put their family assets at stake and do not have the backing of a large company's structure.
Am I covered if a claim is made after I leave office?
Yes, through the extended reporting period. It is one of the clauses we review most carefully.
Does it cover fines?
Personal penalties, where they are legally insurable. Criminal fines are never insurable.
Those who sign for the company deserve to be protected.
An adviser reviews your situation and calls you during office hours.