Directors and officers liability insurance

The significant responsibilities involved in running and administering a company go hand in hand with equally significant risks. To ensure the directors and officers of your company are not liable with their private assets in the event of negligence or a misguided business decision, it is important to have comprehensive protection against liability risks.

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Benefits of directors and officers liability insurance from AXA

  • Attractive conditions
  • Customized extended coverage
  • Professional support in the event of a claim

Who needs D&O liability insurance?

Whether it’s a major corporation or an SME, members of the executive board, board of directors, and all other governing bodies of the firm have a legal responsibility to take decisions in the best interests of the company. If they neglect their duties of loyalty or care, and the firm consequently suffers financial loss, they can be held personally liable by the firm’s shareholders and creditors. This can have unpleasant financial consequences for the persons responsible, as their liability risk isn’t covered by professional liability insurance or any other liability policy. Only directors and officers – or D&O – liability insurance provides appropriate cover.

Who do we mean by directors and officers?

Persons with functional responsibility for a legal entity such as a stock corporation (AG), limited liability company (GmbH), or equally a foundation or cooperative, have a vital responsibility towards the functioning of the business.  Officers and directors comprise individuals or groups of individuals who have representative authority within and beyond the legal entity. 

What is D&O liability?

A legal relationship with rights and obligations exists between directors/officers and their company. In other words, directors and officers are personally liable to the company as well as to individual shareholders and creditors for any loss caused by a willful or negligent breach of their obligations. This also applies where tasks are delegated to others: If a breach of obligations occurs, the corporate body bears supervisory responsibility and is liable. 

Typical cases where directors and officers are liable:

  • Breach of supervisory responsibilities
  • Misguided decisions, taking decisions too late, or failing to take decisions
  • Failure to comply with the law
  • Erroneous valuation of mergers, acquisitions, or disposals 
  • Failure to implement restructuring measures in the event of the company’s potential insolvency

Examples of loss

Breach of supervisory responsibilities: The former accountant of a company has transferred tens of thousands of Swiss francs to his personal bank account. The managing director is liable with her own assets for the loss incurred, as her failure to supervise and control the employee constitutes a breach of her supervisory responsibilities. 

Breach of duty of care: The company wishes to acquire another company. As time is of the essence, the directors and officers decide not to perform detailed due diligence. The acquisition proves to be a big mistake: The acquiring company has to inject large amounts of cash in order to restructure its new subsidiary, resulting in substantial losses.  

Breach of the law: Owing to a serious irregularity in the dismissal notice given to a former employee , the company is forced to pay her a substantial settlement.

What does D&O liability insurance cover?

Whether it’s an IPO or merger, bankruptcy or erroneous profit forecasts – running and administering a company is challenging and provides many grounds for lawsuits against the responsible officers and directors. D&O liability insurance gives affected managers and supervisory bodies protection by paying out compensation in justified cases – while rejecting unsubstantiated liability claims – and providing legal protection. Fact is, claims against directors and officers of a company can trigger protracted legal proceedings that not only cost a lot of money but also absorb a substantial amount of time and generate a lot of stress.


Each policy is tailored to the specific risks faced by the directors and officers of your company. Choose from a comprehensive range of benefits:

  • Defense against excessive or unjustified claims
  • Indemnities for justified claims
  • Coverage of interest, cost of mitigation, cost of expert opinion, attorney fees, court and mediation costs, indemnification of the legal expenses of an opposing party 
  • Legal protection in criminal and administrative proceedings (including investigation costs)
  • Worldwide cover (including US/Canada)
  • Contingent insurance for new directors and officers, subsidiaries, and third-party mandates
  • Coverage of employee claims
  • Claims in connection with taxes and social insurance contributions
  • Coverage of emergency costs in the event of impending claims
  • Coverage of reputation costs and psychologist consultancy fees
  • Coverage of costs in event of self-incrimination
  • Coverage of costs in the event of shareholder derivative actions
  • Coverage of defense costs for proceedings relating to a disqualification from exercising an activity
  • Coverage of costs in case of seizure of assets (including living expenses)
  • Extradition costs 
  • Prior acts coverage when concluding a contract
  • Retroactive coverage for former directors and officers, subsidiaries, and third-party mandates
  • Waiver of the defense of gross negligence

Support in the event of a loss

A loss is settled in close cooperation with the insured. In addition, the insured benefits from the expertise of a 15-strong team  as well as lawyers and auditors specialized in financial loss liability insurance. 

Who is insured?

The company is the policyholder, and persons in the following function or capacity are insured:

  • Member of the board of directors of a stock corporation (AG);
  • Member of the board of a cooperative;
  • Managing director of a limited liability company (GmbH);
  • Members of the boards of associations;
  • Trustees;
  • Members of executive boards and senior management (including interim managers);
  • Members of internal audit units;
  • Employees assigned de facto director or officer functions;
  • Founders of a legal entity;
  • Liquidators, in the case of voluntary liquidation

What special solutions and supplementary coverage are available?

Decision-makers in the employee benefits insurance space, as well as members of the governing bodies of municipalities and those of public institutions, operate under particularly high expectations in relation to their activity. AXA offers policies tailored to the specific risks faced by their directors and officers. It is also possible for directors and officers to protect themselves against personal liability risks in the event of a breach of their obligations independently of the undertaking.

D&O insurance for BVG (OPA) foundations (employee benefits institutions – OBIs)

In an increasingly challenging market, decision-makers at BVG (OPA) institutions are responsible for investing pension assets totaling several billion Swiss francs. Insureds and legislators rightly place high demands on them. With its tailored policy, combined D&O and professional liability insurance for employee benefits institutions and their managers provides comprehensive protection in the event of claims brought by third parties. 

Insurance for governing bodies of municipalities

According to cantonal legislation on responsibilities and liability, governing bodies of municipalities (e.g. members of the municipal or city council, head teachers, or executive staff of the municipality) may be held liable for loss caused to third parties as a result of their actions or decisions. Recourse to the governing body of the municipality is also possible if a breach of obligations occurs in the case of delegated or outsourced tasks. AXA policies are tailored to the needs of municipalities and offer security as well as professional support in the event of a claim.

Prevention offer with our partner Structuul AG

Prevention is the most effective means of countering white-collar crime. It begins with the establishment of prevention risk consciousness.

In order to provide the best preventive protection for your company, an individual analysis by proven experts is recommended. Working with Structuul AG, AXA offers you the opportunity to take preventive measures in your company and implement protection at an early stage.

AXA gives companies that have completed an individual Fraud.Prevention.Awareness program with Structuul AG a one-time discount of CHF 250 on the next annual premium of their DO or fidelity insurance with AXA&.

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    Make provision and secure a discount

    Companies insured with AXA benefit from a CHF 750 discount on the Fraud.Prevention.Awareness program.

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Support and frequently asked questions

  • How many claims are there in Switzerland?

    No official figures on frequency in Switzerland are available. As insurers, however, we are seeing a steady increase in D&O liability claims. Investors and shareholders are seeking to minimize their risk and protect their own capital; accordingly, they are increasingly holding officers and directors responsible in the event of bankruptcy or insolvency.

  • Does the insurance also cover reputation costs?

    Yes. If it is established that the public image and good reputation of an insured is damaged in the course of a claim, AXA will pay the costs of restoring the image and good reputation of the insured and will also cover psychologist consultation fees. 

  • Does D&O insurance make sense for my company?

    The answer in the case of most SMEs is an emphatic “yes”. Fact is, the statutory basis of D&O liability is identical whether your company is small, medium, or large.  Directors and officers of SMEs in particular have faced liability suits on an increasing basis in recent years.

    Cover is particularly advantageous for companies that have a large number of shareholders with varied interests or financial investors, if there are major plans for restructuring, investments, or acquisitions or disposals within the market place, or if your company operates in a sector with major potential risks in terms of bodily injury, property or environmental damage. But not only that: it also makes sense if you find yourself in a difficult financial situation and are perhaps at risk of bankruptcy – even where this is due solely to a potential bankruptcy on the part of key suppliers or customers. And it is worthwhile in any case if the director,  officer, or other senior employee who looks after your liability issues would simply like to have this type of insurance in place.

  • Don’t company structures such as a limited liability company (GmbH) or stock corporation (AG) already protect the private assets of managers?

    No. D&O constitutes a personal liability on the part of the directors and officers. 

  • Are claims made against directors and officers even if they comply with their duty of care?

    Yes, experience shows that even if directors and officers fully adhere to their duty of care they are not immune from D&O liability claims. The growing litigation culture is leading to an increase in unsubstantiated claims that need to be defended against through costly processes.

  • Is prevention possible in terms of D&O liability?

    Yes. In collaboration with Structuul AG , AXA offers a preventive program that helps managers and senior employees better assess the risks in terms of their personal liability and claims for damages , and to take appropriate preventive measures at an early stage. In addition, participating companies receive a discount on their insurance premium.

  • Is the insurance benefit reduced in the case of gross negligence?

    No – in all its D&O insurance policies, AXA has put in place a waiver of the objection of gross negligence.

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