Liability insurance: professional indemnity and D&O cover

It is common for a company to obtain for its directors professional indemnity insurance and also directors and officers (D&O) insurance. The two policies cover different liabilities. The former is concerned with professional activities whereas the latter is concerned with claims arising solely by reason of the role of officeholder. Typically, each policy will exclude claims covered by the other.

The relationship between two such policies was considered by the New Zealand Court of Appeal in Fund Managers Canterbury Ltd v AIG Insurance New Zealand Ltd [2017] NZCA 325. The Court of Appeal reversed the first instance decision of Rebecca Ellis J, [2017] Lloyd’s Rep IR 128.