Security for decision makersD&O insurance for management and supervisory boards

You manage a company or parts of a company and are responsible for day-to-day management tasks in your organisation. Your decision-making area extends over: Planning, organisation, management and monitoring of the enterprise. Your liability for errors in the performance of these activities, even in the case of the most ordinary negligence – is unlimited with your private assets (as managing director, board member, often as supervisory body, as well). This may even be the case retroactively up to 10 years (and beyond) after ending the activity. Thus the area of conflicting priorities, in which managers move to accomplish their tasks, is challenging and complex.

D&O insurance is a financial loss liability insurance for executive bodies and the executives of a company. The core of the insurance cover is the personal liability of the insured persons. This protects the respective private asset from being tampered with as a result of organ-associated action. MRH Trowe’s D&O experts, experienced lawyers and business economists, provide you with sound advice tailored to the corporate law particularities of your enterprise.

MRH Trowe supports you in carefully selecting the insurer to achieve effective protection for bodies and decision-makers (directors and officers). Excellent access to all D&O insurers in Germany and Europe, generates tailored coverage concepts, as well as calculation of a sufficient sum insured. In addition, MRH Trowe will provide you with a specialised network of lawyers in the event of any loss that threatens financial existence. As a manager, you will receive the best possible advice, even in times of crisis.

Team of Experts D&O Insurance for Management and Supervisory Boards +49 69 66 05 889-86 Request callback
D&O insurance company-financed

Basic principle of D&O insurance for all managers of the company

D&O insurance is “insurance for third-party account”: The policyholder is generally the company; insured persons (beneficiaries) on the other hand, are governing bodies and executives of the company (directors and officers). Occurrence of the insured event is always based on the “claims-made principle”. It occurs with the first written claim on the part of an insured person within the insurance period. If there is a damage case, the insurer takes over the defence against unfounded claims or the indemnification of justified claims. As part of the (extremely important) legal protection function of D&O insurance, in particular the insurer covers the costs for civil law legal advice for the board member. In addition, costs are met for criminal law advice, crisis communication professionals and PR measures, if necessary.

Liability scenarios under D&O insurance:

  • Breach of duty, even by doing nothing (simple negligence suffices)
  • Liability with private assets
  • Organisational debts
  • Selection errors
  • Supervision fault
  • Internal liability
  • External liability, in particular claims in conjunction with insolvencies

Insured persons (selection):

  • Executive bodies (e.g. managing directors, board members)
  • Supervisory, controlling and advisory bodies (e.g. supervisory board, executive board, advisory board)
  • Chief representatives
  • Authorized officers
  • Senior executives
  • Shareholders
  • Employees as commissioned personnel for compliance, data protection, money laundering, security, environment, etc.
  • Works council members

Current condition highlights:

  • Arbitration
  • Operative activity is also insured
  • Minimized coverage exclusions (e.g. co-insurance of conditional intent)
  • Protection for offsetting
  • Cost recovery for crisis communication and PR measures
  • Continuity guarantees
  • 144 months late notification period
  • Network of attorneys with pre-approved hourly rates for top independent attorneys
  • Far-reaching policy concerning precautionary legal advice
  • Extensive criminal protection coverage for managers
  • Coordinated claims process with the D&O insurers

Standard exclusions:

  • Direct intentional breaches of duty
  • Claims in the USA / Canada
  • Compensation claims that resulting in remunerations with a punitive character
Personal D&O insurance

Personal D&O insurance as an additional or alternative protective instrument

Personal D&O insurance was launched on the market just a few years ago. It has the same operative principle as a classic, company-financed corporate D&O insurance policy: In the event of a claim against the manager on the part of the managed company or from the outside, the insurer defends against unfounded claims and indemnifies the manager against justified claims. Unlike the D&O corporate policy, personal D&O insurance is taken out privately by the manager, who is simultaneously the policyholder, insured person and the person who pays the premiums. In this regard, it is possible to protect several mandates of a manager under the personal D&O policy. In addition, he is exclusively entitled to the agreed sum insured.


  • Coverage of several mandates possible, also in associations, etc.
  • The policyholder as sole beneficiary (exclusive)
  • Additional sum insured can be purchased (double bottom), if the sum insured of the D&O company policy could be exhausted in the event of claim – danger that the sum insured will be apportioned to other parties
  • Independence from corporate decisions and the possibility of being “discreetly” D&O insured
  • Transferability to subsequent mandates if the policyholder changes companies
D&O supervisory board insurance

Today’s D&O coverage concept embodies a uniform policy for all board members and executives of a company. This concept ties in with the monistic system of the US (One-Tier Board System). However, the dualistic two-tier board system prevailing in Germany is hardly taken into account in this regard. Here there is a separation of management and supervisory bodies in the form of executive board / management and supervisory board / administrative board / advisory board. If the controlling body is held liable due to a lack of oversight on the part of the executive board, considerable gaps in coverage can occur under conventional D&O cover concepts. In extreme cases, the members of the supervisory body are not covered under the D&O corporate policy. Consequently more and more, special D&O insurance protection for supervisory bodies is necessary for good corporate governance and due to stricter compliance requirements.

Increased requirements of the supervisory board:

  • Stricter case law and increasingly critical owners/investors
  • Increased statutory liability and more rigorous requirements for the Supervisory Board member himself
  • Increased standard of care for specialised knowledge and in times of crisis
  • General standard § 111 paragraph 1 of the Stock Corporation Act (AktG): “The supervisory board must supervise management” (preventive supervision and, if necessary, repressive supervision)

MRH Trowe Supervisory Board Protect Policy

The Supervisory Board Protect Policy is an innovative insurance concept developed to promote good corporate governance. It protects members of the supervisory body exclusively, within the framework of an “excess of loss solution”. The members of the supervisory body always remain insured under the primary D&O corporate policy. Insurance cover via the excess of loss solution “Supervisory Board Protect Policy” is triggered by explicitly defined exceptional events. For an insured event, the scope of cover corresponds to that of the D&O corporate policy (“following form”). However, the supervisory body then has access to an exclusive sum insured by a second, unencumbered D&O insurer. To avoid conflicts of interest, the D&O corporate policy and supervisory board protect policy must be taken out from different insurers.

Highlights of the Supervisory Board Protect Policy:

  • Additional coverage only for the supervisory bodies if the coverage of the D&O corporate policy has been used up
  • In the case of third party notice, through the management to the supervisory board member, the interests of the supervisory board member can be optimally enforced
  • Insurance cover also includes the costs of a PR consultant for the purpose of protecting reputation
  • The insurer of the supervisory body is independent of the insurer of the D&O corporate policy
  • There is no reason to hope that insurers will comply with “Chinese walls”
  • Insurance cover is also granted if the D&O corporate policy is challenged retroactively due to fraudulent misrepresentation on the part of management when the D&O contract is entered into – or if a special representative has been appointed in accordance with § 147 paragraph 2 of the Stock Corporation Act (AktG).

Trigger of the Supervisory Board Protect Policy:

  • Third party notice on the part of the management board to the supervisory board member
  • Contestation of the D&O insurance
  • Upstream depletion of coverage of the D&O corporate policy on the part of management
  • Special representative as stipulated in § 147 paragraph 2 of the Stock Corporation Act (AktG)
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