Vietnam
Directors’ and Officers’ Liability Insurance

Directors’ and Officers’ Liability Insurance


Risk has taken on a new life and is part of every board room discussion for personal reasons as much as for business drivers


The concept of directors and officers being personally liable for their actions is globally recognised, with each country in the region adopting a corporate law regime with accountability of directors & officers specifically referenced. It is often said that culturally, Asia has a much lower inclination to litigate than western cultures. It follows therefore that the risks of being a director in Asia are also far less than of western counterparts.

Unfortunately this is no longer the case. The blame assigning culture is becoming more common. The global financial crisis was a watershed event in Asia for many reasons and to acknowledge just one, there has been a marked change in our attitude towards litigation which is now considered as a fair and reasonable process for dispute resolution.

Shareholder class actions against directors and officers are on the rise as too are derivative actions where shareholders seek compensation for their losses. Directors and officers have other duties towards an ever increasing number of stakeholders and accountability is an expectation that can result in litigation.

To complicate matters even more, fewer companies today rely solely on domestic markets to fuel revenue growth and whether your business is regional or global, be aware that your exposure to liability travels across borders.

If your business fits this profile, you need to understand the laws of other jurisdictions will challenge measures you have taken to protect the interests of your directors and officers. An insurance policy purchased in one country may be invalid in responding to a claim brought in another country. Possibly more concerning, your company may be legally unable to indemnify a director or officer for liability incurred outside of the holding company domicile.

Key Insurance Features


Directors & Officers Liability Insurance provides your directors and officers with personal liability and financial loss coverage from wrongful acts committed, or allegedly committed.

More specifically, D&O insurance can:

  • Cover litigation brought by stakeholders against directors and officers where there has been an allegation of a breach of duty or breach of law

  • Respond to litigation arising out of a broad range of business activities including IPO or other debt or equity initiatives, M&A, financial reporting & other statutory obligations and corporate failures

  • Provide umbrella cover to all the directors and officers of the holding company and all subsidiary companies. The insurance can also extend to joint venture or associated company board positions

  • Cover all the current, past and future directors and officers on an unnamed basis

  • Pay legal defence costs, including the advancement of defence costs as well as settlements and judgments awarded by the court for indemnified claims

  • Cover employment related claims brought against the company

  • Cover securities claims brought against the company

  • Be structured to comply with the insurance laws of other jurisdictions.

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