{"id":519,"date":"2024-06-07T00:00:00","date_gmt":"2024-06-07T00:00:00","guid":{"rendered":"https:\/\/exs.suba-agency.com\/seguro-do-garante-a-protecao-de-administradores-e-diretores\/"},"modified":"2026-06-26T14:27:45","modified_gmt":"2026-06-26T14:27:45","slug":"do-insurance-guarantees-protection-for-officers-and-directors","status":"publish","type":"post","link":"https:\/\/exs.pt\/en\/blog\/do-insurance-guarantees-protection-for-officers-and-directors\/","title":{"rendered":"D&O Insurance: Provides protection for Executives and Directors"},"content":{"rendered":"

D&O Insurance: What Is It, and Why Should You Have It If You're an Executive?<\/h4>\n

The pandemic has exacerbated a trend that had been gaining momentum since the global financial crisis began to take hold in 2008: the rise in the number of complaints against corporate executives and directors.
\nAfter the news landscape of recent years was marked by negative stories involving executives and their decisions, the mitigation measures imposed by the government and health authorities have forced many companies to resort to remote work and layoffs\u2014measures that have led to an increase in complaints against companies and ultimately made D&O (Directors & Officers) insurance an increasingly sought-after product.<\/p>\n

\"insurance-and-the-importance-of-ensuring-protection-for-managers-and-directors_1.jpeg\"<\/p>\n

What is D&O (Directors & Officers) Insurance?<\/h4>\n

In practice, this insurance\u2014which can be translated into Portuguese as \u201cdirectors\u201d and officers\u2019 liability insurance\u201d\u2014is designed to protect directors, managers, and executives against lawsuits filed by third parties, such as government regulatory agencies, clients, liquidators, or administrators, or even by their own company.
\nIn terms of coverage, this type of insurance covers expenses related to the fees of outside attorneys retained to defend a director or officer in such legal proceedings, as well as damages and settlements, provided that no fraudulent conduct is established against them.
\nAlthough it does not resolve any criminal issues, D&O insurance helps cover the risks of liability claims and provides legal defense for executives.<\/p>\n

Most Common Types of Complaints<\/h4>\n

Although many complaints cut across all sectors of activity and company sizes, there are some differences worth highlighting.
\nFor example, in the case of PSI-20 companies\u2014that is, publicly traded companies\u2014complaints come mainly from the shareholders themselves, whereas in labor-intensive SMEs operating in sectors more exposed to occupational risks, complaints generally stem from violations of labor law\u2014a trend that has intensified during the current economic crisis resulting from the pandemic.
\nIn addition to individual complaints, claims may take the form of class-action lawsuits, well-known examples of which include the \u201cBES victims\u201d and the Coelima textile workers. In these cases, driven by a common cause, a group of customers or employees files a class-action lawsuit against a specific company in court.
\nAlthough, after reviewing the claims, many of these cases ultimately result in the insured being held not liable, this still requires the director or officer to defend themselves and incur costs associated with that defense\u2014something that the D&O policy covers.<\/p>\n

Generally speaking, since 2005, of the thousands of claims filed in Europe regarding the civil liability of directors and officers, the main sources of these claims are:<\/p>\n