Directors’ and Officers’ Liability Insurance protects the personal assets of your firm’s directors, partners, and senior decision-makers if they are personally sued for alleged wrongful acts in the management of the firm.
It covers legal defence costs, compensation payouts, and investigation expenses from civil, regulatory, or criminal claims.
🏛️ Why Law Firms Need D&O Insurance
Law firm directors and partners make critical decisions daily about:
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Financial management
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HR and hiring/firing
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Client contracts and fees
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Mergers, regulatory compliance, data protection
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Health & safety or employee wellbeing
If a claim is made against a director personally, even if baseless, legal costs can be huge—and personal assets like homes or savings could be at risk.
🧾 What Does D&O Insurance Cover?
| Covered Situations | Example |
|---|---|
| ❗ Breach of duty or negligence | A director is accused of poor financial oversight |
| ⚖️ Employment law violations | Claims of wrongful dismissal or discrimination |
| 📉 Misrepresentation to clients or regulators | False statements in firm marketing or contracts |
| 🏦 Financial mismanagement | Accusations of mishandling client or trust funds |
| 🧑⚖️ SRA or ICO investigations | Directors named in regulatory probes or enforcement actions |
| 📑 Misleading financial statements | Inaccurate figures reported to investors or regulators |
🚫 What’s Not Covered?
| Not Covered | Explanation |
|---|---|
| Deliberate fraud or criminal acts | Proven intentional wrongdoing is usually excluded |
| Claims against the firm itself | D&O protects individuals—firm-wide protection needs other cover |
| Professional negligence | Covered under Professional Indemnity Insurance (PII) |
| Bodily injury/property damage | Covered under PLI or ELI |
👤 Who Is Protected?
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Directors and Partners (equity and salaried)
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Officers and Managers with decision-making roles
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Non-Executive Directors
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Trustees of staff pensions or legal aid accounts
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Legal administrators or practice managers (if named)
D&O covers past, current, and future directors, including those retired (for historic acts).
🧮 Policy Limits and Premiums
| Firm Size / Risk Profile | Typical Limit | Estimated Annual Premium |
|---|---|---|
| Small firm (1–3 directors) | £500k – £1M | £250 – £500 |
| Medium firm (4–10 directors) | £1M – £2M | £500 – £1,200 |
| Large or multi-office firm | £2M – £5M+ | £1,200 – £5,000+ |
Premiums depend on:
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Number of directors/partners
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Firm size and revenue
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Claims history
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