You are personally liable – even if the company is incorporated
It still surprises many board members: as a board member or executive in a Danish company, you are personally and unlimitedly liable for damages caused by irresponsible management. This applies regardless of corporate form. Your personal finances – your home, savings, assets – can be at stake.
And the risk is growing. According to Allianz D&O Insights 2026, the frequency of new claims against boards and executives has risen continuously for three years and is approaching pre-pandemic levels. Average settlement costs rose 27% in the first half of 2025 alone.
Who can bring claims against you?
Claims against management can come from multiple directions:
- Shareholders and owners – dissatisfaction with returns, strategic misjudgements or lack of transparency
- Creditors – particularly in insolvency, where administrators almost always investigate management's decisions
- Authorities – regulatory violations, tax matters or compliance failures
- Employees – discrimination, unlawful termination or workplace environment issues
- The company itself – new management can bring claims against predecessors
New risk sources in 2026
Beyond the classic risks, three new areas are significantly increasing exposure for board members:
1. AI and algorithmic liability
When companies make decisions based on AI systems – about hiring, credit scoring, pricing or strategy – management can be held liable for the consequences. The board is expected to understand and oversee the AI systems the company uses.
2. NIS2 and cybersecurity
With the NIS2 directive, cybersecurity is now a board-level responsibility. Management must actively engage in cybersecurity governance, and non-compliance can trigger personal liability. It is no longer sufficient to delegate to the IT department.
3. ESG and CSRD reporting
Errors in sustainability reporting can trigger claims from investors, regulators and advocacy groups. With the CSRD directive, reporting requirements have been significantly tightened, and greenwashing cases are increasingly ending up in court.
Insolvency: The biggest D&O risk factor
Global insolvencies are expected to rise 5% in 2026 – the fifth consecutive year of increases. The number of bankruptcies is now 24% above pre-pandemic levels, and the number of "mega-bankruptcies" (over $1 billion in assets) is at a record high.
In insolvency, an administrator will systematically examine management's decisions in the period leading up to bankruptcy. Typical claims include:
- Continuing operations after the point of no return
- Preferential treatment of certain creditors
- Failure to file for bankruptcy in a timely manner
- Failure to act on warning signs
What does D&O insurance cover?
A Directors & Officers insurance policy typically covers:
- Compensation claims against management for errors and omissions
- Defence costs – lawyers, litigation and arbitration
- Investigation costs – in regulatory investigations
- Crisis management – PR advice and communications assistance
The market is in your favour – right now
The D&O market is in a soft phase with falling premiums and broader coverage. According to WTW, the market is experiencing relaxed conditions that give buyers better opportunities than in several years.
This means you can:
- Upgrade your coverage without significant premium increases
- Expand policy scope to include new risk areas (AI, ESG, cyber)
- Negotiate higher coverage limits at the same price
What should you do?
- Check your existing D&O insurance – does it cover AI liability, ESG risks and cyber-related claims?
- Assess the coverage limit – is it adequate given the company's size and risk profile?
- Ensure all board members are covered – including independent and recently departed members
- Renegotiate now – market conditions are favourable, and it is unclear how long they will last
