However, a multinational D&O policy may not be the best fit for every company given the risks, exposures, and local insurance coverage needed here in Australia. This article outlines some of the reasons why a local management liability policy may be a better fit for your business.

What is a D&O policy and why is it important?

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A Directors and Officers (D&O) policy is a form of liability insurance that provides coverage for directors and officers for claims made against them for wrongful acts in relation to their role or through the course of their duties.

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It is important for companies to have a D&O policy in place for several reasons. The policy can provide coverage for defence costs and damages associated with a wide range of claims that may occur, including errors and omissions, and negligence. The policy also protects the director or officer’s personal assets should they be held personally liable for their alleged actions.

The choice between a Local Management Liability policy and Multinational D&O Policy will depend on the specific needs and risks of the company, as well as the jurisdiction in which it operates. However, a local Management Liability policy can provide several advantages over a Multinational D&O policy, including:

• Compliance with local laws and regulations
  A local Management Liability policy can provide peace of mind and help ensure your company is compliant with the legal and regulatory requirements of your jurisdiction. Whereas, for a Multinational D&O Policy, companies may need to source additional policy terms or conditions to meet these requirements, which can mean higher premiums and limitations in coverage.
  
  
  
• Minimise coverage gaps
  Opting for a Local Management Liability policy usually means there is a lower risk of coverage gaps compared to a Multinational D&O. This is because the policy is designed to address your company’s specific risks and exposures in that jurisdiction.
  
  
  
• Ease of communication
  Working with a local insurance provider or broker allows you to communicate in your local time zone and language which can help to streamline processes such as seeking out policy documents, claims advice, or navigating risk management strategies. The local presence may be able to provide faster response times and a more personalised service in addition to minimising late night work calls and meetings.
  
  
  

How Honan can help

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Honan is the exclusive Asia Pacific member of the Worldwide Broker Network (WBN). This is especially valuable for multinational clients who need coverage in multiple countries or regions. If your company has sites in multiple jurisdictions, Honan can work with brokers in the WBN to coordinate multiple Local Management Liability policies.

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As a Honan client, this gives you access to a global network of insurance markets to find the most suitable solutions with brokers who have the knowledge to help navigate the local regulations and customs.

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With you all the way

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At Honan, we have the resources, collaboration tools, and expertise to help provide tailored solutions for our clients. Feel free to reach out to discuss how we can help you manage your risk exposures.

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Aleisha Van Dyke
Client Executive – Global & Networks

aleisha.vandyke@honan.com.au