An insurance policy usually taken out by a company on behalf of its directors and officers to cover liabilities arising from their activities as directors or officers of the company.

The Companies Act 2006 expressly permits a company to purchase and maintain insurance for its directors, or the directors of an associated company, against any liability attaching to them in connection with any negligence, default, breach of duty or breach of trust by them in relation to the company of which they are a director (section 233, CA 2006).

For more information, see Practice note, Directors' and officers' liability insurance.