If you’re a company director, board member, trustee (even for a family trust or an Association), sit on a committee for a charity/non-profit you could be personally liable for the decisions you make. And with increasing legal scrutiny across all sectors, that’s a risk exposure too big to ignore.
That’s where Directors and Officers (D&O), Association or Trustees Liability Insurance comes in. It’s designed to protect individuals in governance roles from personal financial loss if someone alleges they’ve made a mistake or acted improperly in their role.
What Is D&O / Trustees Liability Insurance?
This type of cover protects individuals from claims made against them in their capacity as directors, officers, or trustees. If someone alleges you’ve breached your duty, made a poor decision, or failed to act, and this has caused damages or loss, you could be held personally responsible.
D&O insurance helps cover:
- Legal defence costs and representation to professional bodies
- Settlements or compensation
- Claims made by employees, shareholders, creditors, regulators, or beneficiaries
Without this cover, you may have to defend yourself and fund any payouts personally.
It’s Not Just Big Corporates at Risk
Traditionally, D&O cover was something you’d associate with large, publicly listed companies. But today:
- SMEs, not-for-profits, sports associations and family trusts are increasingly facing legal claims
- Governance expectations have risen across all sectors with greater levels of accountability
- Stakeholders are more willing to challenge decisions in court
- Regulators are tightening compliance requirements with greater penalties being handed down
If your business has directors or your trust has trustees — you need to consider this cover.
Why Businesses, Associations & their Officers Should Take Notice
If you own a business, or help run a company or an association you may think the business structure or the association that you work/volunteer for protects you — but that’s only true to a point. If you’re found personally liable, your own assets could be at risk.
Common claims against directors include:
- Misleading statements to investors or customers
- Breach of employment law (e.g. unfair dismissal)
- Failure to comply with health and safety or privacy legislation
- Poor financial oversight or mismanagement
- Lack of action in key areas of exposure such as cyber protection
Even if the claim has no merit, defending it can be expensive — and D&O cover helps with those costs.
Real Life Case Study: When Trustees Are Held Accountable
A real-world example highlights just how easily things can go wrong:
An accountant and a lawyer were trustees of a family trust. The trust deed stated the capital should be distributed when the youngest son turned 30, unless all beneficiaries agreed to delay.
The settlor verbally confirmed the sons were happy to leave the funds in the trust due to ongoing investments. But later, one son, dealing with marital issues, demanded his share. When the trustees didn’t comply, he filed a formal claim, alleging they had breached their duty. By then, the trust’s value had dropped in the market.
The resulting claim: $160,000, settled for $130,000, with legal fees covered by Trustees Liability Insurance. Without it, the trustees could have faced massive personal financial exposure.
Who Needs This Type of Cover?
You should seriously consider D&O or Trustees Liability Cover if you:
- Own or direct a business, even a small one
- Sit on a board or committee for a charity or not-for-profit
- Act as a trustee for a family trust, investment trust, or super fund
- Want to attract independent or professional directors/trustees to your organisation.
Let’s Make Sure You’re Protected
At The HTL Group, we help business owners, board members, and trustees assess their risk and get the right cover in place. Whether you’re overseeing a family trust or helping run a growing enterprise, we can help protect what matters most — your peace of mind and your personal finances.
Contact us today to book a free review and check your protection is fit for purpose.
