D&O and business liability: the boardroom is a different risk
A claim about a management decision is not the same as damage caused by daily operations. Map who is being accused and what policy responds.
The company name on a policy is not enough
A growing SME may already carry business liability and assume its directors are therefore protected against every claim connected with the company. That inference can be costly. Swiss insurer descriptions reviewed on 16 October 2026 distinguish operating liability from directors-and-officers liability, commonly called D&O. The latter addresses claims connected with an insured person’s management responsibilities, subject to the actual wording. It is not simply a higher limit on the same policy. Start by asking who could be pursued personally and for which alleged decision, rather than treating all disputes bearing the company’s name as one insurance category.
Map the role, claimant and alleged loss
An operational incident damaging a customer’s property and a shareholder’s allegation of a director’s management failure raise different questions. Neither automatically proves liability or coverage. Identify the legal entity, the person’s role, the claimant and whether the alleged loss is bodily injury, physical damage or financial loss. Then ask the broker or insurer which contract should receive notification. A board member serving several organisations should not assume one employer’s policy covers every external mandate. The primary insurer pages linked here illustrate D&O protection of personal assets and defence costs, but the covered persons and functions must still be read in the specific contract.
A hypothetical claim that starts with a letter
Imagine an investor alleges that directors approved a major purchase without adequate information and demands CHF 250,000. The directors dispute the allegation, but need advice before replying. The demand is not a proven debt, and its size is not a measure of what insurance will pay. Preserve the decision records and notify the potentially relevant insurer through its required process. Ask about defence-cost approval before appointing advisers independently. This invented example illustrates the immediate cost of defending a claim as well as possible compensation. A liability policy can matter even when an accusation is unfounded; it should not be treated as an admission that the directors acted wrongly.
Compare the difficult clauses before buying
Ask who shares the limit, whether defence costs reduce it, which jurisdictions and subsidiaries are included, and how existing circumstances or earlier acts are handled. Check the trigger for notification, any continuing reporting options after a mandate ends and exclusions relevant to the business. Do not assume fines, intentional misconduct or every insolvency-related allegation can be insured. A policy can include company reimbursement features as well as individual protection; ask how payments would work in practice. Compare quotations on the same corporate structure and mandate list. Otherwise a broader title or larger headline sum may conceal less usable protection when several people need a defence simultaneously.
Insurance should support, not replace, governance
Keep meaningful minutes, document information considered, manage conflicts and make responsibility for follow-up clear. Do not write a retrospective record to disguise what actually happened. Review the insurance after new investors, acquisitions, restructuring or new external mandates, because the risk map may change before the next renewal. Separate D&O from operational and professional liability in the company’s insurance inventory so staff know where to route a claim. Clearwise can help organise a comparable review of these contracts. The goal is clear responsibility and an understood defence process, not a promise that insurance makes every management decision safe or shields every director from every consequence.
Sources and further reading
Original Clearwise analysis. External reporting provides context; rules and contract terms must be verified with the competent authority or provider. Some press articles may require a subscription.
Apply this to your situation
Compare your actual documents and clarify what matters before making a commitment.
Request a free consultationGeneral guidance, not a binding quote or personalised legal, tax or investment advice. Examples are hypothetical and results are not guaranteed.
