Directors and Officers Insurance Ireland: What D&O Covers and Who Needs It

What is directors and officers insurance in Ireland?

Directors and officers insurance, usually shortened to D&O, covers the personal legal liability of the people who run a company. It pays defence costs, settlements and awards when a director, company secretary or senior manager is personally accused of a wrongful act in the way they managed the business. Under the Companies Act 2014 an Irish director’s duties are owed personally, and a claim can reach personal assets. D&O sits between that risk and the director’s own money.

It is a management liability cover, not a property or injury cover. If a customer is hurt on your premises, that is public liability. If your professional advice caused a client a financial loss, that is professional indemnity. D&O answers a narrower and far more personal question: who pays when somebody sues the director rather than the company?

Why do Irish company directors need personal cover?

The Companies Act 2014 gathered the principal fiduciary duties of a director into one place. A director must act in good faith in what they believe to be the interests of the company, act honestly and responsibly, exercise the care, skill and diligence a reasonable person would exercise, avoid conflicts of interest, and use company property only for proper purposes. Those duties attach to the individual. The company cannot absorb them on your behalf.

Enforcement sits with the Corporate Enforcement Authority, which replaced the Office of the Director of Corporate Enforcement in 2022. Where a company becomes insolvent, directors can face restriction or disqualification proceedings, and they are generally expected to fund their own defence. Even an allegation that ultimately goes nowhere starts generating solicitor and counsel fees in the first week.

The other thing owners tend to underestimate is how wide the pool of potential claimants is. A director can be pursued by a shareholder, a fellow director, an employee, a liquidator, a bank, a landlord, a customer, a competitor or a regulator.

What does a D&O policy actually cover?

Most wordings are built in three sections, and the labels are broadly standard across the market.

Section	Who it protects	What it typically pays for
Side A	The director or officer personally	Defence costs and awards where the company cannot or will not indemnify the individual, typically after an insolvency
Side B	The company’s balance sheet	Reimbursement of the company where it has lawfully indemnified a director and met the costs itself
Side C	The company as a named defendant	Claims brought against the entity itself, most often securities related, which matters far more to listed companies than to a typical Irish SME

Claims in an Irish small or medium company tend to be ordinary rather than exotic:

• A shareholder or co director alleging mismanagement, breach of duty or oppression of a minority.
• Employment related allegations such as unfair dismissal, bullying or discrimination where a director is named personally, subject to the policy or an extension picking that up.
• Investigation and representation costs when a regulator or the Corporate Enforcement Authority begins an inquiry and a director has to be represented.
• Actions taken by a liquidator or creditors after a company fails, including reckless or fraudulent trading allegations.
• Health and safety prosecutions in which an individual officer, not just the company, is named.
• Disputes with lenders or investors about statements made when raising finance.

Who is insured under the policy?

Cover normally follows the role rather than the name, so it picks up past, present and future directors without you having to schedule everyone. Most wordings extend to the company secretary, to shadow and de facto directors, to senior managers when they are acting in a managerial capacity, and in many cases to the estate or legal representatives of a director where a claim continues after death or incapacity.

What is not covered by directors and officers insurance?

Exclusions vary by insurer, but a few appear on almost every schedule:

• Fraud, dishonesty and deliberate criminal acts. Many wordings only bite once dishonesty is established by judgment or admission, which means defence costs can be advanced up to that point and then repaid.
• Personal profit or remuneration the director was not legally entitled to.
• Bodily injury and property damage, which belong on public liability or employers liability cover.
• Failures in the professional service you provide to clients, which belong on professional indemnity.
• Fines and penalties where Irish law does not permit them to be insured.
• Claims and circumstances the director already knew about before the policy incepted. This is why the proposal form asks what you are already aware of.

Which Irish businesses should think about D&O?

It is not only a large company product. The profiles that come up most often are limited companies with more than one shareholder, where a falling out has somewhere to go; family businesses moving through a succession; companies that have taken on external investment or significant bank debt; charities, clubs and companies limited by guarantee, whose board members are frequently unpaid volunteers with the same legal exposure as any other director; owners’ management companies for apartment developments; and any business trading in a regulated sector or selling into the United States.

If you are a sole trader with no company structure, D&O is not the right product, and your exposure sits instead on public liability, professional indemnity and the rest of your business insurance programme.

How much does D&O insurance cost in Ireland?

There is no published tariff, and any figure quoted without seeing your accounts is guesswork. Underwriters price the risk on turnover and sector, the strength of the balance sheet, how many directors there are, your claims and insolvency history, whether outside investors or lenders are involved, whether you trade internationally, and the limit of indemnity you choose.

As a rule of thumb, a small owner managed Irish company with steady turnover, no external investors and a clean history sits at the modest end of the range. A company with United States operations, a live fundraise, a distressed balance sheet or a history of disputes sits well above it. Premiums also move with the wider market cycle, so the same risk does not always attract the same price two years running.

How do you choose a limit of indemnity?

The limit is usually shared across every insured person and every claim in the policy period, so one heavy defence can erode what is left for everyone else. When setting it, think about how many directors would realistically be drawn into the same dispute, what a contested case could cost in legal fees before anyone reaches a settlement, whether an investor or lender agreement obliges you to hold a particular limit, and whether you want a separate Side A layer that cannot be exhausted by company reimbursements.

How does a claims made policy work?

D&O is written on a claims made basis. The policy that responds is the one in force on the day the claim is first made against you and notified to insurers, not the one that was in force when the decision was taken. Two practical consequences follow.

1. Continuity matters. A gap between policies, or a change of insurer without matching the retroactive date, can leave years of past decisions unprotected.
2. Run off cover matters. If the company is sold, wound up or you simply retire from the board, a claim can still land years later. Run off extends the window for notifying claims about acts committed while you were in office.

Retiring directors are the group most often caught out. Standing down does not end the exposure, and once the company stops buying cover there may be nothing left to respond. Ask what happens to your protection before you resign, not after.

The bottom line

Directors and officers insurance is the cover that protects the individual rather than the enterprise. In Ireland it earns its place because the Companies Act 2014 makes a director’s duties personal, because insolvency and regulatory proceedings are aimed at people rather than balance sheets, and because defence costs start accumulating long before anyone decides whether the allegation had merit. If your business is a limited company with a board, external money, employees or a voluntary committee, it is worth having the conversation.

Breeze Insurance is an Irish insurance broker working with a panel of leading Irish insurers, and we place management liability alongside the rest of a commercial programme so the sections do not overlap or leave gaps. If you want to know what a policy would look like for your company, call us on 0818 700 300 or request a quote and we will come back to you.

Frequently asked questions

Is directors and officers insurance a legal requirement in Ireland?

No. Unlike motor insurance, D&O is not compulsory. It is often required contractually, however. Investors, venture capital funds, banks and some public sector contracts commonly make it a condition, and charity regulators and funders increasingly expect boards to hold it.

Does D&O cover me if I am a sole trader?

Generally not, because there are no directors or officers without a company structure. A sole trader’s personal exposure is already unlimited and is managed through public liability, professional indemnity and product liability instead.

Is D&O the same as professional indemnity insurance?

No, and businesses often need both. Professional indemnity answers claims from clients about the professional service or advice you sold them. D&O answers claims about how the company was governed and managed, usually brought by shareholders, employees, creditors or regulators rather than customers.

Are charity and voluntary board members covered?

Only if the organisation buys cover. Serving unpaid does not reduce the legal duties owed by a director of a company limited by guarantee, and volunteers can find themselves personally named. Trustee indemnity or a D&O policy written for the not for profit sector is the usual answer.

Does D&O pay fines imposed by a regulator?

Usually not. Irish law does not permit certain fines and penalties to be insured, and policies exclude them accordingly. What a policy generally does fund is the legal representation, investigation and defence costs of getting to that point, which are frequently the larger number.

What happens to my cover if the company is sold or closed?

The live policy typically stops responding to new notifications once the company is sold or dissolved, which is what run off cover is for. Run off is normally bought for a fixed number of years at the point of sale or wind up, and it keeps the notification window open for acts committed while the board was in office.

Breeze Insurance Ltd. is regulated by the Central Bank of Ireland. Registered in the Republic of Ireland with registration number 109879 and registered address at 38/39 Fitzwilliam Square, Dublin 2, D02 NX53. Director: Colin Long.