If you are a director, manager, or a member of a board of directors, there is a reality you need to be aware of: in Portugal, directors are personally liable — with their personal assets — for management decisions that cause damage to the company, shareholders, creditors, or third parties.
It's not theory. It's law. And legal proceedings against directors have grown significantly in recent years, driven by increased corporate litigation and an increasingly demanding regulatory framework.
What is D&O insurance
Directors & Officers (D&O) insurance protects the personal assets of directors, managers, and officers against claims related to their management decisions. It covers legal defence costs and potential compensation.
When personal liability is triggered
- Management decisions resulting in losses for the company
- Non-compliance with tax or regulatory duties
- Company insolvency with evidence of mismanagement
- Breach of duties of loyalty or care
- Claims from minority shareholders
- Proceedings by the Tax Authority or Social Security
Who needs D&O insurance
Anyone holding a position of administration, management, or supervision — in companies of any size. SMEs are often the most vulnerable, as their directors tend to be more exposed and less informed about this risk.
What a good D&O policy should cover
- Legal defence costs (even if the claim is unfounded)
- Compensation and out-of-court settlements
- Regulatory and administrative proceedings
- Coverage for spouses and heirs
- Retroactive coverage and extended reporting period
At Adler & Rochefort, we structure D&O policies that effectively protect those who make decisions every day. Schedule a free and confidential analysis.