In general terms, directors’ liability insurance compensates for

• The civil defence costs:the costs of a lawyer and the like if someone tries to hold you liable in court.
• The damages: the compensation to a third party that a court orders you to pay will be taken for the account of the insurer, within the limits of the insurance policy.

The most important point is often the defence costs. It is not that directors are constantly being held liable, but they are increasingly being called to account. Then you have to be able to defend yourself adequately. The costs of the defence quickly become very high.

In general terms, directors’ liability insurance compensates for

• The civil defence costs:the costs of a lawyer and the like if someone tries to hold you liable in court.
• The damages: the compensation to a third party that a court orders you to pay will be taken for the account of the insurer, within the limits of the insurance policy.

The most important point is often the defence costs. It is not that directors are constantly being held liable, but they are increasingly being called to account. Then you have to be able to defend yourself adequately. The costs of the defence quickly become very high.