Directors and officers insurance in Nicosia: cover, costs, and how to choose a policy.
Protect directors, officers and senior managers against the financial consequences of claims arising from their business decisions.
We compare D&O cover from several insurers and help you choose an appropriate limit, retention and policy wording for your company.
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Directors can face claims personally, not only through the company. Directors and officers liability insurance, usually called D&O insurance, can cover eligible defence costs, settlements and other liabilities arising from allegations made against them in their insured role.
Cover remains subject to the policy's terms, exclusions, retention and limit of liability.
Why directors in Cyprus may need protection
A limited company does not remove every risk faced by its directors.
Sections 197 and 383, Companies Law Cap 113
A company generally cannot exempt or indemnify its officers in advance against liability for negligence, default, breach of duty, or breach of trust. A court may later grant discretionary relief if a director acted honestly and reasonably, but this is not guaranteed.
Directors may also face personal exposure under other legislation, including in connection with:
Under section 48 of the Cyprus VAT Law, directors and managing officers may face criminal liability where the company commits a VAT offence and they participated in the relevant decision. The outcome will depend on the facts of the case.
What does D&O insurance cover?
A D&O policy can respond to claims alleging a wrongful act by a director, officer or other insured person while carrying out their duties. Exact cover varies between insurers, but a policy may include the following.
Management and fiduciary-duty claims
Defence against allegations of negligence, mismanagement, breach of duty or failure to act in the company's best interests.
Misstatements and reporting errors
Claims involving alleged misleading statements, omissions or errors in company reports, financial information or other disclosures.
Shareholder and creditor claims
Protection against eligible claims brought by shareholders, investors, creditors or insolvency office-holders.
Regulatory investigations
Some policies cover specified legal and professional costs arising from formal regulatory investigations or proceedings.
Employment-related allegations
Certain policies or extensions may cover claims made personally against directors in connection with employment decisions.
Defence costs
Eligible lawyers' fees, expert costs and other defence expenses may be covered, including where an allegation is ultimately dismissed. Defence costs often form part of the overall policy limit, so they can reduce the amount remaining for a settlement or judgment.
What is normally excluded?
D&O insurance is designed to cover allegations and unintended wrongful acts. It is not intended to protect deliberate misconduct. Common exclusions may include:
Some policies advance defence costs while allegations of fraud or dishonesty are being investigated. Those costs may become excluded or recoverable once deliberate misconduct is admitted or established. Always check the precise conduct-exclusion wording.
How much D&O cover does your company need?
There is no standard limit suitable for every business. When selecting a limit of liability, consider:
We can obtain quotations at different limits and retentions, allowing you to compare the additional protection against the additional premium.
What affects the cost of D&O insurance?
D&O premiums are individually underwritten. Two companies with similar turnover may receive different terms because their activities, finances and management exposures differ. Insurers commonly consider:
Industry and activities
Companies operating in regulated or higher-risk sectors may require broader cover and more detailed underwriting.
Turnover, assets and financial condition
Insurers may review revenue, assets, debt, profitability and the company's latest financial statements.
Ownership and corporate structure
The number of subsidiaries, ownership arrangements and whether the company is privately held or publicly listed can affect the risk.
Countries of operation
Companies trading internationally, particularly in jurisdictions associated with higher litigation costs, may pay more.
Previous claims
Insurers will ask about previous claims, threatened proceedings and circumstances that could reasonably lead to a claim.
Corporate changes
Acquisitions, fundraising, restructuring, insolvency concerns and significant changes in management may affect the available terms.
Policy options
The selected limit, retention, extensions, territorial scope and discovery or run-off period all influence the premium.
Why arrange D&O cover through an insurance adviser?
D&O policies should not be compared on price alone. Definitions, exclusions and claims-reporting requirements can differ significantly between insurers. We help you compare:
Our aim is to help you understand what each quotation covers before you make a decision.
D&O insurance checklist
Before accepting a quotation:
Frequently asked questions
D&O insurance is not generally compulsory for Cyprus companies. It may, however, be required by an investor, lender, commercial contract or sector-specific arrangement.
Only to a limited extent. Cyprus law restricts the exemptions and indemnities a company can provide. Good governance and contractual indemnities can help, but they do not offer the same protection as a properly structured D&O policy.
Typical exclusions include deliberate fraud, dishonesty, intentional illegality, illegal personal profit, previously known matters and liabilities that cannot legally be insured. Exclusions differ between policies.
Many policies cover former directors for eligible acts or omissions that occurred while they were serving. The claim must still comply with the policy's claims-made, continuity and reporting provisions. Discovery or run-off cover may be needed when a director retires, the company is sold or the policy is not renewed.
There is no universal figure. The appropriate limit depends on the company's finances, activities, shareholders, creditors, regulatory exposure and likely defence costs. Obtaining quotations for several limits is often the clearest way to compare the cost of additional protection.
The company normally purchases the policy and pays the premium. Depending on its structure, the policy protects individual directors and reimburses the company for indemnification it is legally permitted to provide.
A policy may fund the defence of an allegation while it is unresolved. Deliberate fraud or dishonesty is normally excluded once established by the form of final decision specified in the policy.
As soon as the policy requires. D&O insurance is generally written on a claims-made basis, so late notification can affect cover. Notify the insurer or insurance adviser promptly if a claim, formal investigation or potentially claim-producing circumstance arises.
An adviser can obtain and compare available quotations and explain important differences in exclusions, defence-cost treatment, continuity and claims support. This is particularly useful for D&O insurance, where apparently similar quotations may provide materially different protection.
Protect the people responsible for your company
We compare D&O insurance options based on your company's activities, structure, financial position and management exposures. You will receive clear guidance on the available limits, important exclusions and the protection offered to current and former directors.
Get a free D&O insurance quoteThis page provides general insurance information and is not legal advice. Cover is subject to the insurer's policy wording, schedule, endorsements, exclusions and applicable law.