Personal D&O insurance is the right choice for managers who want additional security in addition to existing (but possibly insufficient) D&O corporate insurance or because the company does not have D&O insurance.
What is insured?
The insurance cover is similar to D&O corporate insurance. The main difference is that only one person is insured and no other person can access the insured amount.
If a manager is accused of breach of duty and a claim is made for compensation for the financial loss resulting from the alleged breach (insured event), it is the task of the D&O insurer to examine the liability issue, to defend against unjustified claims against the manager and – if the defence fails – to pay out the compensation on behalf of the manager.
In addition to these typical functions of third party liability insurance, there are generally also other cover components that can protect the manager in certain situations (e.g. assumption of legal costs in the event of premature termination of a contract of employment in advance of a compensation claim, criminal-law protection, cost of reducing reputational damage, etc.).
Who is insured?
The insured party (and policyholder) is solely the manager in the relevant insured position.
Who provides the insurance?
At present there are roughly a handful of insurers among the many D&O insurers in Germany who are capable of offering D&O individual insurance cover. As a result, the insurance sums currently available “per person” do not even come close to the amount that companies can purchase.