Management Liability Claims Scenario – Directors and Officers Liability

Company directors face personal risk when allegations of mismanagement or breach of duty arise. This real-life scenario shows how Directors & Officers (D&O) insurance helped a senior executive respond to legal action from a disgruntled shareholder. Download the free case study to see how cover applies in practice.

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Executive Summary

This one-page case study explores a Directors & Officers Liability claim involving legal action brought by a shareholder against a company director.

What happened:

• A shareholder alleged misrepresentation and poor decision-making by a company director

• The director faced personal legal action and reputational risk

• The claim included compensation demands and threats of further litigation

How D&O insurance responded:

• Provided legal defence costs for the individual director

• Appointed specialist legal counsel with experience in shareholder disputes

• Helped preserve the director’s reputation and financial position

• Enabled swift and strategic resolution without draining company resources

Why this matters:

• Directors can be personally liable for decisions made in their role

• Claims can come from shareholders, regulators, employees, or third parties

• D&O insurance protects individuals and supports fast, expert response

This guide is ideal for company directors, senior managers, and board members reviewing their personal liability exposure.