Covers the damages and defense costs when directors, auditors, the CEO and other officers face personal liability in civil or criminal proceedings over decisions made in the course of their duties.
N2N Insurance Brokerage does not represent any single insurer — it independently represents the client as an FSS-registered broker (Reg. No. 2026-012201). We compare the wordings, rates and service of AIG · Chubb · DB · Hyundai · KB · Meritz to propose the cover and price best suited to your risk. Each insurer's full wording is provided at application and binding.
Directors & Officers Liability Insurance (D&O) covers a company's directors, auditors and executive officerswhen they face a damages claim from the company, shareholders, employees, business partners or regulators for breach of the duty of care or duty of loyalty in the course of their duties, indemnifying that loss and the defense costs.
It responds to directors' liability for damages under the Commercial Act (Articles 399 and 401), disclosure liability under the Financial Investment Services and Capital Markets Act, and shareholder derivative suits and regulatory investigations arising from breaches of competition, tax and environmental law.
Side A (direct payment to the individual officer) / Side B (reimbursement of the company's indemnification) / Side C (the company's own securities-law liability).
Legal fees at the early stage of an investigation, inquiry or suit are advanced immediately to support the officer's legal response.
An Extended Reporting Period of up to 6 years can be set for a retired officer's acts while in office.
Effectively essential for listed companies, IPO candidates and PEF-invested companies.
Listed and pre-IPO companies exposed to disclosure liability and securities class actions.
Risk of shareholder disputes, tax audits, FTC investigations and derivative suits.
D&O cover is a practical condition for appointing outside directors and auditors.
VC/PEF investment terms (SHA) often require D&O cover.
| Policy period | 1 year (Claims-Made basis) |
|---|---|
| Payment | Single (annual) payment |
| Insurers | AIG · Chubb · DB · Hyundai · Meritz |
| Channel | Individual consultation with our adviser (+82-10-5755-6465) |
| Turnaround | 5–10 business days (review of financials) |
If the insured event has already occurred at the time the contract is made, the contract is void. However, where the contract is void due to the company's intent or negligence, or where the company knew or could have known of the nullity before acceptance yet did not refund the premium, the company refunds the premium with interest at the policy-loan rate published by the Korea Insurance Development Institute, compounded annually, for the period from the day after payment to the day of refund.
The specific losses not covered (exclusions) are set out in each insurer's policy wording and product description; on this page, see the “Cover” tab(or the “Losses not covered” section) for the main exclusions. For other cover-specific grounds on which claims are not paid, please refer to the policy wording.
The company provides cover, in accordance with the policy, from the time it accepts the application and receives the first premium. Where the company accepts the application after receiving the first premium with it, cover also begins from the time the first premium was received.
The application must be completed by the policyholder, and the policyholder and the insured must sign it by hand. Failure to sign by hand may result in disadvantages regarding the validity of the contract. On an internet cyber-mall, an electronic signature may be used instead.
The policyholder has the right to be given and have explained the information needed about the product they wish to buy.
The insurer and N2N Insurance Brokerage must explain the important matters of the product to ordinary financial consumers.
When applying, the policyholder, the insured or their agent must disclose truthfully the facts they know regarding the questions in the application (including the questionnaire). Otherwise the claim may be declined or the contract cancelled. Where insurance is taken out by telephone or other means of communication, the duty is performed by answering the seller's questions, which are recorded, without a separate written questionnaire, so answers must be given with particular care.
If, after the contract is made, any of the following arises in respect of the subject-matter insured, the policyholder or the insured must notify the company in writing without delay and obtain endorsement on the policy.
The surrender value is the amount paid if the contract is cancelled early. Unlike bank savings, insurance combines risk protection and savings: part of the premium is paid out as claims to other policyholders who suffer accidents, and part covers the insurer's operating expenses, so the surrender value on early cancellation may be less than the premiums paid, or nil.
Under Article 59-4(1) of the Income Tax Act (special tax credit), for protection-type insurance taken out by an employee only, a tax credit of 12% of the premium paid (capped at KRW 1 million per year) is available. Tax matters may change with amendment or repeal of the relevant tax law.
Except as provided by law, the insurer and N2N Insurance Brokerage do not collect, use, inspect or provide personal data related to this contract — for its conclusion, maintenance and claim payment — without the consent of the policyholder, the insured or the beneficiary. However, for those purposes the insurer may, with the consent of the policyholder and the insured and in accordance with law, provide personal data to other insurers and insurance-related bodies.
The above is a summary and excerpt of the policy wording; for grounds on which claims are not paid and other details, please refer to the policy wording and product description.
Risk patterns common in corporate governance — a 5-scenario self-check
Listed and pre-IPO companies are heavily exposed to officers' personal liability such as disclosure liability and securities class actions.
Private SMEs can also face officer liability through derivative suits, shareholder disputes, tax audits and FTC investigations.
Outside directors and auditors often require D&O cover as a practical condition of appointment.
Investment agreements (SHA) often require D&O cover, making it effectively essential for companies raising investment.
Regulatory investigations may proceed against individual officers, so provision for defense costs is needed.
The essence of D&O insurance is that the liability of the ‘company’ and of the ‘individual officer’ differ. The Commercial Act imposes on directors a liability for damages toward the company, shareholders and third parties, and derivative suits, securities class actions and regulatory investigations may target the individual officer directly. D&O covers this risk in three strands — Side A, paid directly to the officer when the company cannot indemnify them; Side B, reimbursing the company for indemnification it has paid the officer; and Side C, covering the company's own securities-law liability. An officer's liability may also be asserted after retirement over acts while in office, so designing the Extended Reporting Period (ERP) matters.
Source: (standard insurance-textbook scenario)
The wording and structure items decision-makers most often overlook
D&O divides into Side A (paid directly to the individual officer), Side B (reimbursing the company's indemnification) and Side C (covering the company's securities-law liability). The design changes with which strand you need.
An officer's liability may be asserted after retirement over acts while in office. Confirm for how long the Extended Reporting Period (ERP) protects a retired officer.
An officer's willful unlawful act or improper personal gain is excluded. D&O covers liability arising from business ‘judgment’, not willful misconduct.
The questions asked most when considering D&O liability insurance
It protects both the individual officer and the company when directors, auditors and other officers incur liability to the company, shareholders or third parties in relation to management decisions and the performance of their duties. It is used widely not only by listed/IPO companies but also by private companies and startups raising investment.
D&O is designed in a Side A/B/C structure: Side A pays the officer directly when the company cannot indemnify them, Side B reimburses the company for indemnification paid to the officer, and Side C covers the company's own securities-law liability — addressing the risks of both the company and the individual officer.
Covered items include civil damages claims brought by shareholders, the company or third parties (such as derivative suits and securities class actions), defense costs for criminal, administrative or regulatory investigations, and costs of responding to FTC, FSS and NTS investigations.
An officer's liability can be asserted after retirement over acts while in office. An Extended Reporting Period (ERP) can protect a retired officer for a set time, so confirm for how long cover applies.
No. An officer's willful unlawful act or improper personal gain is excluded. D&O covers liability arising from business judgment, not willful misconduct.
The insurer calculates it based on company size and listing status, industry, financial condition, shareholder structure, the limit and Side configuration, and past dispute/litigation history. The exact premium and terms are confirmed after underwriting by insurers such as AIG, Chubb, DB, Hyundai, KB and Meritz.
