The role of directors and officers has become increasingly challenging, particularly in the light of the COVID-19 pandemic and stricter corporate governance regulations. These factors have also resulted in an increasing tendency for shareholders, creditors and the company itself to try to seek compensation from directors and officers personally.
Directors’ and officers’ liability insurance (D&O insurance) is now held by almost all medium and large Spanish enterprises. Businesses have found this product to be an effective tool to:
– Protect directors and officers’ personal assets.
– Assure recovery in the event of a valid D&O claim.
– Cover the legal costs that could arise from a D&O claim which, in some cases, are significant.
This Note provides an overview of the background and characteristics of D&O insurance in Spain. It also describes the features of a typical D&O insurance policy.
Update dated 13/07/2023 of the article originally published on 07/07/2021. Article published in Thomson Reuters