The civil liability insurance of directors and officers (D&O insurance) covers financial losses caused by management board members as a result of mismanagement of the company.
The D&O insurance compensates for financial losses that may result from the improper performance of duties by the company’s governing bodies (e.g. making wrong decisions) and failure to perform activities (lack of decision-making). The insurance is active in case of violation of both general provisions of law and the company’s charter. The insurance covers damages caused to the company and third parties, including shareholders/stakeholders. The insurance covers the costs of legal defence, including costs of proceedings, also in the case of a charge of acting to the detriment of the company. The D&O policy provides legal protection also in case of unfounded or “disputable” claims.