Directors and officers insurance in Cyprus in 2024. Affordable directors and officers insurance quotes.
Directors and officers insurance Cyprus
Sometimes known as D&O insurance, directors and officers insurance protects managers and executives of a company for committed or alleged wrongful acts in managing a company.
This insurance product, which commonly protects the company as well as individuals, covers legal fees, settlements, and other costs associated with D&O claims.
Directors and officers insurance is an indispensable insurance product in Cyprus, and we aim to help you find the best and most affordable contract in Cyprus throughout this guide.
Read on to find out how directors and officers liability insurance in Cyprus can safeguard you and your business.
Table of contents
- What is directors and officers insurance?
- What does directors and officers insurance cover?
- Directors and officers insurance vs professional indemnity insurance
- How much directors and officers insurance do I need?
- Directors and officers insurance examples
- Directors and officers insurance cost in Cyprus
- Affordable directors and officers insurance in Cyprus
- Directors and officers insurance online in Cyprus
- Directors and officers insurance quotes in Cyprus
What is directors and officers insurance?
Directors and officers liability insurance protects directors, managers, and officers of an organisation from losses in the event they are personally sued by vendors, employees, competitors, investors, customers, or other parties, for real or alleged wrongful acts in managing a company.
In other words, D&O insurance is the financial backing for a standard indemnification provision that protects officers from losses due to their role in the company.
What does directors and officers insurance cover?
Directors and officers coverage covers directors and officers who are allegedly involved in the following wrongful acts:
- Insolvent trading.
- Contractual disputes.
- Negligent supervision.
- Misuse of company funds.
- Theft of intellectual property.
- Lack of corporate governance.
- Poaching of competitor customers.
- Misrepresentation of company assets.
- Failure to disclose conflicts of interest.
- Failure to comply with workplace laws.
- Poor productive and economic results due to maladministration.
- Mismanagement (imprudent investing, unauthorised fire selling, concealment of profits).
- Abuse of Authority (coercion, humiliation, intimidation, racial and sexual discrimination, verbal violence).
- Consumer protection violations. Consumer protection rules protect the consumer from fraud and abuse caused by businesses.
- Breach of fiduciary duty that results in financial losses or even bankruptcy. This allegation results from a claim that a company executive or board acted in their self-interest and not in the interest of the organisation they lead.
- Self-dealing and conflicts of interest. Nearly identical to a breach of fiduciary duty, self-dealing involves prioritising yourself or your company’s financial goals over those of clients or shareholders.
- Unfair practices. An unfair trade practice claim is an allegation that your practices are deceitful, fraudulent, or cause harm to the customer. Examples are referral selling, unfair contract terms, and immoral conduct.
Directors and officers insurance Cyprus
Directors and officers insurance provides the following coverages:
- It protects the company’s assets.
- Covers expenses related to reimbursements and settlements.
- Fines and sanctions. In Cyprus, it is not illegal for insurance companies to pay fines against directors.
- Protection from the confiscation of personal assets of companies' directors or their spouses.
- Advertisement and restoration of reputation expenses through a professional public relations manager.
- Protection for the company from reimbursement costs to indemnify directors and officers for their losses and defence costs associated with lawsuits and investigations. Legal expenses (e.g., defence, prosecution, extradition proceedings).
Who is insured under a directors and officers insurance policy?
Directors and officers insurance is issued under the name of the company and not the name of individual directors.
In Cyprus, the name of the directors are not written on the policy, but they should be declared on the application form.
Nevertheless, this insurance provides coverage to a wide range of individuals who are not registered as directors.
Specifically, under this contract, the following individuals can be covered:
- Shadow directors.
- De facto directors.
- Risk managers.
- Independent counsellors.
- Spouse or domestic partner.
- Heirs, legal representatives.
- Senior accounting officers.
- Administrators or executors.
- Nominee directors, non-executive directors, and outside entity directors.
- Any managerial or supervisory employee of any company.
Those who can file a lawsuit against the company for wrongful tasks of its directors:
- Foreign investors.
- Trade partners.
- Insolvency administrators.
- Creditors. Usually, after the company enters the bankruptcy zone.
- Competitors. For anti-trust or unfair trade practices allegations.
- Shareholders. Most claims arise from this category, especially after a financial hardship. In recent years, we have had a severe increase in shareholder activism.
- Regulators. The governments are demanding more transparency due to increasing scrutiny and whistle-blowing. CySEC is imposing administrative fines on Cypriot companies for not complying with Cypriot legislation. The fines are announced on CySEC’s corporate page.
- Authorities and regulators of foreign jurisdictions. Weak economic growth leads many companies to export their business activities to countries that don’t fully comprehend the legal system or the market structure, which might lead to claims.
Directors and officers insurance exclusions
- War & terrorism.
- Money laundering.
- Pollution. The legal expenses are covered but not cleaning expenses (e.g., Deepwater Horizon Oil Spill).
- Claims with prior notice. Every D&O policy includes this exclusion, i.e., if you are aware of something that could result in a D&O claim, it is excluded from coverage.
- Accidental death, bodily injury, and property damage. D&O policies always include bodily injury and property damage exclusion. Your general public liability policy covers these events, so this exclusion limits any overlap between the two insurance policies.
- Deliberate fraudulent acts or omissions. Although D&O insurance covers wrongful acts, the policy will not cover an officer or director who deliberately breaks the law or commits fraud.
- Professional errors and omissions. As we will see below, professional indemnity insurance covers professional negligence.
Directors and officers insurance vs professional indemnity insurance in Cyprus
One common query we receive as an insurance company is how directors and officers insurance differs from professional indemnity insurance.
Firstly, we will define professional indemnity insurance. Professional indemnity insurance protects professionals against claims resulting from their alleged mistakes or omissions.
Professional indemnity insurance protects these professionals against liability for harm or damage to a third party and their property due to their negligent or irresponsible services.
Both D&O insurance and professional indemnity (PI) insurance are types of liability insurance that cover financial losses originating from claims of negligence, errors, or omissions.
However, there are critical differences between these coverages, including the following.
Directors liability insurance protects a company's directors and officers if legal action is filed against them for their conduct in managing a company.
In contrast, professional liability insurance protects a company and individuals that provide professional services (e.g., developers, lawyers, accountants, designers, architects, doctors, and engineers).
Nature of claims
D&O liability insurance plans are designed to cover claims arising from a company’s decision-making that somehow result in the loss of finances for the company or its shareholders.
On the other hand, professional liability insurance plans are designed to protect against claims resulting from the wrongful delivery of professional services to a company’s clients.
Liability insurance for directors and officers claim example
To understand the difference between PI and D&O claims, let’s consider a doctor who happens to be a member of the Board of Directors (BoD) of the clinic in which he works.
If this doctor makes a mistake while performing a medical operation, after which time the patient files a lawsuit against him, the doctor’s professional indemnity (PI) contract will be activated.
Suppose this doctor, as a member of the BoD, makes a bad decision to open a new department that is not profitable, and the company's shareholders decide to file a lawsuit against him. In that case, the doctor’s D&O contract will be activated.
Typically, a D&O insurance policy covers legal proceedings involving claims of any type of misconduct by the insured related to managing the business.
On the contrary, PI insurance is limited to covering legal proceedings that involve professional mistakes resulting from the insured’s services.
How much directors and officers insurance do I need?
Directors and officers insurance policies in Cyprus provide coverage of up to €5 million.
The European Union’s historical data shows that D&O insurance claims can even reach up to €10 million for large international corporations.
These claims rarely surpass €1 million for small companies.
Nevertheless, D&O insurance is a relatively new product, and there isn’t enough data to analyse which companies are more prone to lawsuits against their directors and officers.
As a rule of thumb, we suggest the following limits of liabilities according to a company’s turnover.
|Suggested Limit of Liability (€)
|0 - 500,000
|500,000 - 5,000,000
|5,000,000 - 10,000,000
|10,000,000 - 50,000,000
As mentioned, the required limit of liability depends on the following factors:
- Industry type
- Your level of risk
- Company’s size, assets, and revenue.
Communicate with one of our consultants today, and we will advise you on the optimal limit of liability for your company.
Directors and officers insurance examples
Breach of fiduciary duty. A shipping supply company had a minority shareholder invest in their new business project. The project was not executed due to managerial disagreements.
The outcome was lower profits than proposed, so the minority shareholder made a breach of fiduciary duty and misrepresentation claim.
Unfair dismissal. A company director was personally named in an alleged unfair dismissal of an employee. The director had to attend an employment tribunal to defend himself.
Without D&O insurance, the director would have to pay his own legal counsel and defence costs, even if the case was eventually dismissed.
Former director. A former director of a company sued the current directors after he retired, claiming they plotted to deny him the correct amount of pension benefits he was owed.
To defend the claim, the directors will face significant legal bills. D&O insurance could help cover these costs.
Construction & machinery. A health & safety executive filed a case against a company director after an employee was injured on a construction site.
The director was charged with the failure to manage the site effectively and ineffectively training staff to use machinery. He had to fund his defence costs.
Death in service. The family of a deceased employee charged a director of a company. They claimed the company failed their responsibility for arranging the deceased’s death-in-service.
He had to defend against the claim that the company had been negligent in its duty to arrange this cover.
Property insurance. A company’s manufacturing facility was destroyed in a fire, and the company’s insurance policy wasn’t sufficient to cover rebuilding costs.
The company’s directors decided to sue the director responsible for arranging the insurance after they discovered he didn’t receive professional advice when making his choice.
Corporate manslaughter. A company and its directors were prosecuted after an employee tragically died at work. An agreement was reached after the prosecution case in which all charges against the directors, including negligent manslaughter, were dropped.
They pleaded guilty to corporate manslaughter and were fined, facing the defence costs.
Road risk. A transport director of a company was sued after a fatal car accident involving one of the company’s vehicles.
It was alleged that the company’s schedule meant that the drivers would work while tired, which was implemented by the transport director. He had to fund his own defence costs.
Fire safety. During a standard fire inspection, numerous fire safety issues were found.
The company and its managing director were jointly prosecuted for breaching fire safety legislation.
Misleading investment. A company’s shareholder was persuaded to increase their investment level in the company for a new product launch and investment opportunity.
The new product didn’t pass the development stage, and the project ended prematurely. The shareholder sued the director for misleading them about the proposed investment.
Intellectual property theft. A company and a software developer’s joint venture failed, and the software developer made a misappropriation of intellectual property claim.
The software developer said the company stole his ideas to develop its own software.
The company’s insurance man paid in excess of €200,000 in defence costs and a €50,000 contribution toward settlement.
Directors and officers insurance cost in Cyprus
The price of directors and officers insurance in Cyprus depends on the following factors:
- The company's turnover, net income, total assets, current assets, and liabilities (for the last three years).
- Your required limit of liability and the requested deductible.
- The number of shareholders and directors in your company.
- The number, size, and type of activities of subsidiary companies.
- Line of business of the company.
- How many consecutive years the company has been trading.
- Whether the company was involved in an acquisition or merger.
- If there were any changes in the list of directors and officers in the last two years.
- Jurisdiction and choice of law. You must specify the choice of law (which territory’s law you intend will be used to determine the dispute) and jurisdiction (in which domain you intend any dispute relating to the contract will be heard).
- Any previous claims.
Affordable directors and officers insurance in Cyprus
Our years of experience and expertise enable us to find cheap directors and officers insurance for our clients in Cyprus.
Furthermore, Pitsas Insurances are the largest provider of directors and officers insurance contracts in Cyprus.
Directors and officers insurance Cyprus
Our reputable services and excellent professional relationships enable us to find our clients' the most affordable and profitable directors and officers deals.
We also provide discounts on our underwriter’s predetermined premiums.
If you are looking for cheap directors and officers insurance in Cyprus, you can use our services online to find everything you’re looking for.
Directors and officers insurance companies
Directors and officers insurance in Cyprus is mainly provided through international underwriters (i.e., Munich RE, Zurich Insurance, Markel Insurance, Swiss RE).
Not only do Pitsas Insurances cooperate with international underwriters, but we also cooperate with every underwriter providing services in Cyprus and are thus able to detect the most profitable deals for our clients.
Best directors and officers insurance in Cyprus
Pitsas Insurances is one of Cyprus's oldest insurance companies, which has been operating since 1985.
We proudly hold more local and international awards for our quality of services than any other insurance company in Cyprus.
We are confident that we can provide you with the best directors and officers liability insurance in Cyprus, as we cooperate with both international and local underwriters.
Directors and officers insurance online in Cyprus
Pitsas Insurances provides the whole spectrum of its services online.
You do not need to visit our offices to acquire any insurance contract.
To acquire directors and officers insurance, we can send you the application form electronically (we accept electronic signatures).
We will then assess your case and prepare an official quotation. We can also discuss our offer through video conference.
If you are interested in proceeding with the quotation, sending us a confirmation email to proceed is more than adequate.
Once we have your confirmation and complete our next steps, your contract will be sent to you online.
Directors and officers insurance quotes in Cyprus
Pitsas Insurances is the largest provider of business insurance contracts in Cyprus.
Our company cooperates with the largest international underwriters (including Munich RE, Zurich Insurance, Markel Insurance, and Swiss RE) and with local underwriters.
Pitsas Insurances handle a vast number of contracts and have an excellent relationship with all of the underwriters we cooperate with.
Thus, we can bargain for the best liability insurance for directors and officers deals for our clients and the most profitable contracts.
Furthermore, we provide discounts on our underwriter’s predetermined premiums and an additional 10% discount for every business contract you acquire.
Directors and officers insurance Cyprus
See here for more about our officers and directors liability insurance products.
If you want to compare directors and officers insurance quotes, contact one of our insurance experts today. See here to receive a hassle-free quote.
Directors and officers insurance Cyprus FAQ
Is D&O insurance obligatory in Cyprus?
Directors and Officers insurance is not obligatory in Cyprus.
However, many international companies carry this insurance because it is a standard obligation and best practice when working with clients or suppliers.
How can I reduce the cost of my D&O insurance?
We can help you save money on your insurance using the accurate information you provide.
Using your accurate information, we can tailor your insurance plan according to your needs and omit any additional cover that may be unnecessary and expensive.
We can sometimes examine the possibility of adding a sizable excess amount.
Does my professional indemnity insurance offer the same coverage as my D&O?
No. Professional indemnity insurance only covers your professional errors and omissions.
Directors and officers insurance covers any misconduct affecting an entire group.
What are the odds that my application will be rejected?
Our reinsurance agents are committed to examining and evaluating each case as distinct from one another.
We provide coverage regardless of your company’s size, coverage requests, the nature of your activities, the nationality of your directors, and the number of your branches abroad.
What activities do your current clients participate in?
Our biggest clients are German, Swedish, English, Russian, Cypriot, Ukrainian, and Belarussian companies.
Their activities cover the technology sector, economics, currency exchange, maritime, advertising and marketing, legal services, and real estate services.
Why are you cheaper than your competitors?
We have worked to create an extensive network of partners globally in our 40-year presence in the insurance sector in Cyprus.
Depending on your business activities, we directly forward your application without intermediaries to a minimum of three international reinsurance companies.
We cooperate with international reinsurance companies in the UK, USA, and the Netherlands.
Pitsas Insurances Team