Within a business, senior management play a critical role in the governance and management of a business. Their responsibilities can involve navigating difficult situations and making tough decisions whilst always needing to act in the best interest of the company. 

However, mistakes can still happen. 

Directors and Officers (D&O) Liability Insurance is a policy designed to protect business owners and senior members of management involved in decision-making, action, or inaction within an organisation while they perform their duties as leaders of a company. 

Despite 98.7% of directors covered by Director and Officer Liability insurance, according to a 2023/24 Directors’ Fees Survey by IoD NZ & EY, there is an upward trend in the level of concern around personal liability. Following the Mainzeal Supreme Court ruling, released partway through the survey period, 50.3% of directors (up from 39.0%) said increased personal liability has made them more risk averse in business decision-making*. 

Therefore, if you’re a private or public company, an SME, or a non-profit organisation, buying D&O insurance will provide an added layer of security against potential legal issues that may arise in the future. And, even if the board has already ensured that its directors and senior officer are covered, it is equally important to regularly evaluate if the sum insured including available limits, is sufficient to cover their collective liabilities.

Find out more from an IANZ broker. We’d be happy to help you get the right coverage. 

To know more about the Mainzeal decision, read a 3-part series by law firm Bell Gully here. 

*Source: Director Sentiment Survey 2023 by Institute of Directors NZ & ASB.