D&O insurance for GmbH managing directors
Who can claim against you personally, what German law asks of a managing director, and what a D&O policy has to say to protect you.
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2 minutes · free · no obligation- Your D&O policy, read against the claims that really hit managing directors
- Your shareholding, your co-shareholders and your investors: what the policy does with claims from your own side
- Payments after insolvency (section 15b InsO), taxes and social security: insured, silent or excluded
- Claims from abroad, foreign parents and subsidiaries: territory and courts
- Proof for an investor, a bank or a parent company: what a certificate can and cannot show
D&O insurance for a GmbH in six points
D&O (directors and officers) insurance protects the managing director personally against claims for pure financial loss that arise from a breach of duty. German law makes that liability real: the company itself, an insolvency administrator, the tax authority and the prosecutor can all end up on the other side. This page shows who can claim, what the law asks of a managing director, and what a policy has to say.
Your GmbH may already have a D&O policy. The question is not whether one exists, but whether it responds to the claims that really hit managing directors: claims from your own company and its administrator, payments after illiquidity, taxes and social security, and claims from abroad. This page shows how to check, with the law behind each question.
Key takeaways
- A managing director answers personally. Under section 43 GmbHG, a managing director who breaches duties is liable to the company for the damage, jointly and severally with other responsible directors, and the claim becomes time-barred after five years.
- The claim often comes from your own side. The shareholders decide whether the company claims (section 46 no. 8 GmbHG), and in an insolvency the administrator pursues the claim. The GDV model wording does not insure the part of the company's claim that matches the share held by the managing director who caused the loss and by relatives, with no threshold, so an owner-manager can end up without a damages payment for exactly this claim.
- Insolvency law creates the sharpest personal exposure. Payments after illiquidity or over-indebtedness (section 15b InsO), late filing (section 15a InsO) and unpaid taxes and social-security contributions (section 69 AO, section 266a StGB) are among the typical claims against managing directors of companies in difficulty.
- The model wording is silent on several of these claims. The GDV model neither lists nor excludes tax, social-security and insolvency-law claims, so each policy has to say. The Federal Court of Justice (BGH) has decided three points on the wording before it: in 2020 on payments after illiquidity or over-indebtedness, in 2024 on a clause that ended the contract on an insolvency application, and in 2025 on the exclusion for knowing breaches.
- Time is a coverage term. D&O is written on a claims-made basis: the claim must be made during the policy or the reporting period. Circumstances you already know are usually not covered by a new policy, so the time to sort out cover is before there is trouble.
- Borders and groups matter. The GDV model excludes claims before courts outside the EU and under non-EU law, and it covers subsidiaries only with a seat in the EU. An investor, a bank or a foreign parent may ask for proof of cover; a certificate shows that a policy exists, not what it covers.
What is on this page
Who can claim against a managing director
A claim against a managing director rarely comes from a stranger. It comes from the company, from the administrator who takes over when the company fails, from creditors hurt by a late filing, from shareholders and investors, or from an authority. Each of them uses a different rule, and a D&O policy answers some of them better than others.
The table below translates the terms you will meet into the German policies and rules behind them.
The company
Section 43 GmbHG gives the company a claim for damage from a breach of duty. The shareholders decide by resolution whether to pursue it (section 46 no. 8 GmbHG).
The insolvency administrator
If the company fails, the administrator examines the period before the filing and pursues the company's claims, most often for payments made after illiquidity or over-indebtedness (section 15b InsO).
Shareholders and investors
They decide whether the company claims, and a financing or sale agreement can give them direct claims too, for example from warranties the managing director gave.
Authorities
The tax authority can hold a managing director personally liable for company taxes (section 69 AO). Prosecutors look at late filing (section 15a InsO) and withheld social-security contributions (section 266a StGB).
This page explains how to read a D&O policy for a GmbH. It is a method, not an insurance product, and it is neither a coverage statement nor legal advice: which claims are insured depends on your wording and on the facts.
| Term | German counterpart | What it means | What to watch |
|---|---|---|---|
| D&O insurance (directors and officers liability) | D&O-Versicherung, a liability insurance for pure financial loss of managers | Insures managers against claims for pure financial loss from breaches of duty, and pays the defence against unjustified claims. | Who is insured, against whom, for which claims and for how long after the policy ends. |
| Internal liability | Innenhaftung | The company claims against its own managing director (section 43 GmbHG). | The deduction for your own shareholding, and what happens when an administrator brings the claim. |
| External liability | Außenhaftung | A third party claims against the managing director directly, for example the tax authority (section 69 AO). | Whether liability to authorities is insured at all. The GDV model neither lists nor excludes it. |
| Pure financial loss | Vermögensschaden | Loss that is neither personal injury nor property damage. D&O insures this kind of loss. | Injury and property damage sit in general liability, not in D&O. |
| Claims-made | Anspruchserhebungsprinzip | What counts is when the claim is first made against the insured, not when the breach happened. | Retroactive cover, the reporting period and the notice of circumstances. |
| Retroactive cover | Rückwärtsdeckung | Cover for breaches that happened before the policy started. | Known circumstances are excluded, and the GDV model defines known broadly. |
| Reporting period | Nachmeldefrist | The period after the policy ends in which claims can still be reported. | Its length, its price, and whether you can still buy it after an insolvency application. |
| Notice of circumstances | Meldung von Umständen | You report circumstances that may lead to a claim, and a later claim counts as made when the notice was given. | Whether the wording allows a notice, how precise it must be and how long the claim may follow. |
| Deductible | Selbstbehalt | The part of a loss that you carry yourself. | The mandatory deductible in section 93(2) AktG applies to stock corporations only, not to a GmbH. |
Closest counterpart, not identical: wording and exclusions differ by insurer. The model wording is a non-binding GDV template.
What German law asks of a managing director
A managing director's liability does not rest on one rule. Company law, insolvency law, the tax code, the criminal code and the IT-security law each add a duty, and they put different claimants on the other side. The table takes eight rules and sets each next to the question to put to your insurer.
The summaries are short and in plain English. Only the German text of the statutes is binding.
| Provision | What it requires | Who is on the other side | What to ask your insurer |
|---|---|---|---|
| Section 43 GmbHG: duty of care and liability to the company | A managing director must apply the care of a prudent businessperson. A director who breaches this duty is liable to the company for the damage, jointly and severally with other responsible directors. Section 43(3) names payments contrary to section 30 and the acquisition of own shares contrary to section 33 as specific cases. Claims become time-barred after five years. | The company, usually after a shareholders' resolution, and an insolvency administrator. | Are claims by our own company insured, with or without a deduction for shares held by the managing director and relatives? Does the reporting period run longer than the five-year limitation period? |
| Section 46 no. 8 GmbHG: who decides on the claim | The shareholders decide whether the company pursues compensation claims against managing directors, and how the company is represented in a lawsuit against a managing director. | Your co-shareholders, who instruct the company. In an insolvency the administrator pursues the company's claims. | Is a claim that follows a shareholders' resolution an insured claim, and are the defence costs paid from the first letter? |
| Section 15a InsO: duty to file for insolvency | The managing directors must file without culpable delay, at the latest three weeks after illiquidity and six weeks after over-indebtedness. A late, missing or incorrect filing can be a criminal offence: up to three years or a fine if intentional, up to one year or a fine if negligent. In a company without a managing director, each shareholder must also file, unless unaware of the situation. | Creditors, who can in some cases claim damages directly (section 823(2) BGB with section 15a InsO), the administrator, who examines what happened in the period before the filing, and the public prosecutor. | Is the defence in a criminal proceeding insured from the start of the investigation, and at which fees (GDV model, A-6.1)? How does the exclusion for knowing breaches work (A-7.1)? |
| Section 15b InsO: payments after illiquidity or over-indebtedness | After illiquidity or over-indebtedness has occurred, managing directors may not make payments unless they are consistent with the care of a prudent and conscientious manager. Payments in the ordinary course, especially those that keep the business running, are generally treated as consistent, during the filing period only while the directors work diligently to remove the insolvency or to prepare a filing. After the deadline has passed, payments are generally not consistent. A managing director who pays regardless must reimburse the company, limited to the creditors' loss if that is smaller. | The insolvency administrator, for the company. | Are claims under section 15b named as insured? In 2020 the BGH held that a claim under the former section 64 GmbHG fell under the damages clause of the wording before it. Ask whether your wording says the same, in writing. |
| Section 1 StaRUG: early-warning duty | The managing body must continuously monitor developments that could threaten the company's continuation and, once it recognises such developments, take suitable countermeasures and report promptly to the supervisory bodies. Where other bodies are responsible, the managing directors must involve them promptly. | The company or its administrator, as a breach of the duty of care. | Does the policy insure a claim that says you saw the crisis too late? A breach you already knew of when a new policy started is excluded (GDV model, A-5.2). |
| Section 69 AO with sections 34 and 35: liability for company taxes | A managing director who intentionally or through gross negligence breaches the duties of the tax code is personally liable for tax claims that are not assessed or not paid in time, for wrongful refunds and for late-payment surcharges. | The tax authority, directly against you. This is external liability. | Are tax-liability claims named as insured, and are the defence costs paid? The GDV model neither lists nor excludes taxes, so ask in writing. |
| Section 266a StGB with section 14 StGB: withheld social-security contributions | An employer who withholds employees' social-security contributions and does not pay them over faces up to five years in prison or a fine. Under section 14(1) no. 1 StGB the employer's characteristics are attributed to the members of the company's representative body, so the managing director is the person caught. | The public prosecutor, and the social-security institutions that collect the contributions. | Is the defence in the criminal proceeding insured, and what happens to the cover if a court finds intent (GDV model, A-7.1)? |
| Section 38 BSIG: NIS2 duties of the management | The management of particularly important and important entities must implement the security measures and oversee their implementation, and must be trained regularly. Managers who breach the duty to implement and oversee the measures are liable to their entity for damage caused through fault, under the company-law rules of its legal form. | The company, as an internal claim under company law. | Does a cyber or IT-security exclusion in the D&O policy take this claim out? Check how the D&O policy and the cyber policy fit together. |
Short summaries of the statutes, not legal advice. Only the German text is binding. Checked on 30 October 2026 (see Sources).
These rules sit in different statutes and meet different claimants. A D&O policy has to be read against each of them: some are claims for damage to the company, some are claims against you personally by the state, and some are criminal proceedings in which only the defence can be insured. The next sections show how to read your own policy against them.
How good is your D&O cover? The traffic-light check
This is the part of the page to use with your own policy in your hand. It follows the claims described above, one by one: who can claim, which claims the policy names, and when and up to what amount it pays.
The check goes criterion by criterion. A D&O policy answers the claims against you personally. General liability, cyber and legal expenses insurance answer different risks and do not replace it.
Who is insured, and against whom
Which claims the policy names (your company, an administrator, shareholders, authorities), how your own shareholding is treated, and which companies and former directors are inside.
What is insured
Whether payments after illiquidity or over-indebtedness, taxes and social security, investigations and IT-security duties are named, silent or excluded.
Trigger, time and limits
Which event triggers the policy, how long cover continues after it ends, and whether the sum insured, the territory and the defence costs fit your company.
The shareholders sue their own managing director
Example Packaging GmbH, 35 employees, has three shareholders. The managing director holds 25% of the shares. The managing director lends EUR 200,000 of the company's money to a business friend without security and without asking the shareholders, and the borrower becomes insolvent. The shareholders resolve under section 46 no. 8 GmbHG that the company claims the EUR 200,000 from the managing director.
Policy A: shareholding deducted
The wording follows the GDV model: the part of the claim that matches the managing director's 25% stake is not insured. EUR 50,000 stays with the managing director personally. The insurer examines the remaining EUR 150,000, up to the sum insured and after any deductible.
Policy B: no shareholding deduction
Claims by the company are insured in full, with no deduction for the managing director's shares. The insurer defends against the unjustified parts and pays what is justified, within the sum insured and after any deductible.
Fictional company and invented figures, for illustration only. Real outcomes depend on the policy wording and the facts.
The traffic-light check for D&O cover
| Criterion | Good | Review | Gap |
|---|---|---|---|
| Who is insured, and against whom | |||
| Claims by your own company | Expressly insured, also when the shareholders resolve to bring the claim (section 46 no. 8 GmbHG). | The wording mentions third-party claims only; internal claims are unclear. | Internal liability is excluded. |
| Claims by an insolvency administrator | Expressly insured, with no cut because the administrator acts for the company. | Not mentioned: ask in writing whether the administrator's claim counts as an internal claim. | Excluded, or treated as an excluded internal claim. |
| Your own shareholding | No deduction from company claims for shares held by the managing director or relatives. | A deduction applies, but only above a threshold or in limited cases. | The part of a company claim that matches the share held by the managing director and relatives is not insured, with no threshold, as in the GDV model wording (A-6.3); at 100% no damages are paid. |
| Former and future managing directors | Former and new managing directors are insured automatically. | Insured only on request or on notification. | Former directors are not insured. |
| Subsidiaries and new group companies | Subsidiaries are insured in every country where you operate, and new group companies automatically from the day of acquisition. | Subsidiaries with a seat in the EU only, and new group companies after notice and the insurer's consent in text form (GDV model, A-4). | Only the parent is insured, or subsidiaries are missing from the schedule. |
| Indemnity by the company | Where the company may lawfully indemnify you against a third-party claim, the benefit passes to the company to the extent it pays (GDV model, A-3). | Possible only on request or with a sub-limit. | Not provided for: the company pays and the insurer does not. |
| What is insured | |||
| Payments after insolvency (section 15b InsO) | Claims under section 15b are named as insured, with defence costs. | Silent: the wording speaks of damages in general. Ask in writing whether such claims are included. | Excluded, or the insurer says that the claim is not a claim for damages. |
| Tax and social-security liability | Named as insured, including the defence in investigations. | Silent, as in the GDV model wording, which neither lists nor excludes them. Ask in writing. | Excluded. |
| Investigations and criminal proceedings | Defence costs are paid from the start of an official investigation, with counsel of your choice and agreed fees above the statutory schedule (RVG) where needed. | Paid only if the insurer requested or approved the counsel, at the statutory fee schedule (RVG) or at higher fees agreed with the insurer, as in the GDV model wording (A-6.1). | Not paid until a charge or a civil claim exists. |
| IT security and NIS2 duties | Claims for neglected IT-security duties, including the management duties under section 38 BSIG, are insured, with no general cyber exclusion. | Insured, but with a sub-limit or a narrow cyber exclusion: read it together with your cyber policy. | A general cyber or IT exclusion takes the claim out. |
| Trigger and time | |||
| Trigger and notice of circumstances | Claims-made, and you can report circumstances during the policy and for a stated period after it ends; a claim that follows counts as made at the time of the report. | Circumstances can be reported only during the policy, or after it ends only if the insurer terminated the contract (the GDV model wording, A-5.4), or the claim must follow within a short period. | No notice of circumstances is possible. |
| Retroactive cover and known circumstances | Unlimited for breaches you did not know of, and what counts as known is defined narrowly. | Limited in time, or known is defined broadly: the GDV model counts a breach as known if you recognised it as possibly wrong, or if it was described to you as wrong, even conditionally (A-5.2). | No retroactive cover. |
| Reporting period | 6 years or longer, because internal claims against managing directors become time-barred after 5 years (section 43(4) GmbHG). | More than 12 months, but under 6 years. | 12 months or less. |
| Exclusion for knowing breaches | Applies only after a final judgment finds a knowing breach of duty; defence costs are paid until then. | Applies already on a non-final court finding. | Applies already on an allegation or a suspicion. |
| If the company becomes insolvent | No automatic end of the contract; cover for breaches up to the insolvency application continues and the reporting period is secured. | Cover only for breaches up to the application (GDV model, A-5.5), and an extra reporting period can no longer be bought if the contract then ends (A-5.3). | The contract ends automatically at the end of the policy period in which the application is filed. The BGH held such a clause invalid on 18 December 2024 (IV ZR 151/23, on the wording before it), but your wording may still contain one. |
| Limits, territory and costs | |||
| Sum insured and sharing | A sum insured that matches what could realistically be claimed, with the sharing between directors and claims in a year stated. | One limit for all insured persons and all claims in the policy period, as in the GDV model wording (A-6.4 and A-6.6). | A sum insured below what a claim of the size described on this page would cost. |
| Defence costs | Paid in addition to the sum insured, also in investigations. | Paid within the sum insured, as in the GDV model wording (A-6.4). | Capped, or reimbursed only once a court case has started. |
| Territory and courts | Worldwide, or at least every country where the company and its subsidiaries operate, including claims before courts outside the EU and under foreign law. | Claims abroad are covered only for named countries or with a sub-limit. | Claims before courts outside the EU or under non-EU law are excluded, as in the GDV model wording (A-7.5): a gap if you have subsidiaries, investors or customers there. |
| Deductible | None. (The mandatory deductible in section 93(2) AktG applies only to stock corporations, not to a GmbH.) | A deductible is agreed: weigh it against the premium saving. | A high deductible, or one that also applies to defence costs. |
Consulting grid, not norms. A gap is something to know before you sign; it does not mean that every policy must close it. The policy wording decides.
Which situation, which focus?
| Your situation | Where to look first |
|---|---|
| Sole owner-manager | Internal claims and your own shareholding: with all the shares, the GDV model pays no damages on a claim by the company (A-6.3). Check the other claimants (the tax authority, the social-security institutions, a buyer of the company), and ask in writing whether an administrator's claim is reduced in the same way. |
| Several shareholders or investors | Claims by the company after a shareholders' resolution, and how a deduction for your stake works. The model insures claims under statutory liability provisions (A-1): ask how the policy treats liability that rests only on a contract you signed personally, such as a warranty or a personal guarantee. |
| Several managing directors | Under section 43 GmbHG the company can claim the full loss from any one of you. Check the shared sum insured (A-6.4), the deductible per person and how the exclusion for knowing breaches is applied: the model judges each insured person separately (A-7.1). |
| German subsidiary of a foreign group | Territory and group cover: the GDV model excludes claims before courts outside the EU and under non-EU law (A-7.5) and insures subsidiaries with an EU seat only (A-4). Ask how a group programme and a local German policy fit together. |
| Company under financial pressure | Time and insolvency: the notice of circumstances, the reporting period and what the policy says if an application is filed (A-5.4, A-5.3 and A-5.5). Read them now, because a new policy usually does not cover what you already know (A-5.2). |
Rule of thumb from advisory practice, not a legal requirement. What you need depends on your company, your shareholders and your contracts.
Three questions for your insurer
Shareholding and internal claims
Does the policy insure claims by our own company, also when an insolvency administrator brings them, and is anything deducted for the shares held by the managing director or relatives?
Section 15b, taxes and social security
Are claims for payments after illiquidity or over-indebtedness (section 15b InsO) and the liability for taxes and social-security contributions named as insured, silent or excluded, and will you confirm the answer in writing?
Trigger and run-off
Can we report circumstances during the policy and after it ends, how long is the reporting period, and what happens to the cover if the company files for insolvency?
D&O is written on a claims-made basis: what counts is when the claim is first made against the insured person, not when the decision was taken (GDV model wording, A-2). Earlier breaches are covered only if the insured person did not know of them, and the model counts a breach as known if it was recognised as possibly wrong or described to the insured person as wrong, even conditionally (A-5.2). Defence costs count against the sum insured (A-6.4). The model neither lists nor excludes taxes, social-security contributions and payments after illiquidity or over-indebtedness, so each policy has to say where it stands. The GDV model is non-binding, and your policy may differ.
Whoever looks for cover only in a crisis usually gets no protection for circumstances already known. That is why this check belongs in a calm quarter.
For investors and foreign parents
Investors, banks and foreign parent companies sometimes ask for proof of D&O cover. A certificate shows that a policy exists, not what it covers; the limit, the territory and the claims it responds to still have to be read in the wording. The GDV model excludes claims before courts outside the EU and under non-EU law (A-7.5). Our page on US insurance clauses and certificates explains what a certificate can and cannot show.
Sections 15a and 15b InsO: when the duties change
When a GmbH cannot pay its debts as they fall due (illiquidity) or is over-indebted, the managing director's duties change. The filing deadlines of section 15a InsO run from the day the condition occurs, and the payments the company makes are measured against section 15b InsO. This is also the moment when the D&O policy matters most, because it is written on a claims-made basis and a new policy usually excludes what you already know.
The overview below is general information. In a real situation, speak to a lawyer first.
If you suspect that your company is illiquid or over-indebted, speak to a lawyer who knows insolvency law before anything else, and read your D&O policy early: the notice of circumstances, the reporting period and the insolvency clause decide what is left to you later. We help with the policy, not with the legal assessment.
| Rule of section 15b InsO | What it says | What to check in your policy |
|---|---|---|
| Payments after illiquidity or over-indebtedness (section 15b(1)) | After illiquidity or over-indebtedness has occurred, the managing directors may not make payments, unless they are consistent with the care of a prudent and conscientious manager. | Is a claim under section 15b named as insured, or does the damages clause include it? In 2020 the BGH held that a claim under the former section 64 GmbHG fell under the damages clause of the wording before it. |
| Ordinary-course payments (section 15b(2)) | Payments in the ordinary course, especially those that keep the business running, are generally treated as consistent with that care. During the filing period this holds only while the directors work diligently to remove the insolvency or to prepare a filing. | Does the policy insure the defence against the allegation that a payment was not consistent? Keep records that show why each payment was made. |
| After the filing deadline (section 15b(3)) | If the deadline for filing has passed without a filing, payments are generally treated as not consistent with that care. | How does the exclusion for knowing breaches apply (A-7.1 in the GDV model), and who has to prove what? In November 2025 the BGH held, in a case under the former section 64 GmbHG, that late filing alone does not show a knowing breach of the payment ban. |
| Reimbursement (section 15b(4)) | A managing director who pays regardless must reimburse the company. If the creditors' loss is smaller, the duty is limited to that smaller loss. A shareholders' resolution does not release the director where the money is needed to satisfy creditors, and a waiver or settlement by the company is ineffective, unless an insolvency administrator acts for the company, an insolvency plan provides for it, or the person liable is insolvent and settles with creditors to avert insolvency proceedings. | Is the reimbursement claim insured, also when the administrator brings it, and are the defence costs paid until a court has decided? |
| Payments to shareholders (section 15b(5)) | Payments to shareholders that had to cause illiquidity are caught as well, unless this was not recognisable even with the care of a prudent and conscientious manager. | If you are also a shareholder, check the deduction for your own shares (A-6.3) and whether the policy excludes repayment claims for profit shares or other benefits (A-7.2 in the GDV model). |
Short summaries of the statute, not legal advice. Only the German text is binding. The table covers the rules that matter most for D&O cover. Checked on 30 October 2026.
Four steps while the situation is still open
Take legal advice at once
A lawyer who knows insolvency law can tell you whether a filing duty exists and which payments are still consistent with the care the law requires. The deadlines in section 15a InsO run from the day the condition occurs.
Keep records
Write down why each payment was made and what it kept going. Records help you, your lawyer and your insurer to show later why a decision was taken.
Read the policy early
Look at the notice of circumstances (GDV model, A-5.4), the reporting period (A-5.3) and what the policy says if an insolvency application is filed (A-5.5). Ask your insurer in writing what a notice of circumstances has to contain.
Do not expect new cover for what you already know
A new policy usually excludes breaches and circumstances you already know (A-5.2). If you change insurers, answer the new insurer's questions truthfully (section 19 VVG) and do not cancel the old policy before the new cover is confirmed in writing.
Where the model wording stops
The GDV, the German insurance association, publishes a non-binding model wording for D&O insurance, for optional use. It is a useful map of where the questions are. It is not a policy, and in several places it leaves the answer open. The six places below are where it shows.
The clause numbers refer to the GDV model wording for D&O insurance (AVB D&O) unless stated otherwise.
Claims-made, with a broad idea of known
The insured event is the first written assertion of a claim against an insured person during the policy period or the reporting period (A-2). Earlier breaches are covered unless the insured person knew of them, and a breach counts as known if it was recognised as possibly wrong or described to the insured person as wrong, even conditionally (A-5.2). The periods for reporting and for notices of circumstances are left blank in the model (A-5.3 and A-5.4).
Your own shareholding reduces the cover
If the insured person who committed the breach, or a relative, holds a direct or indirect stake in the company (for example through a holding company), the cover leaves out the part of the company's damages claim that matches the stake (A-6.3). The model sets no minimum threshold, and if the stake was larger when the breach occurred, the larger stake is used. Relatives include spouses and registered partners, parents and children (also adoptive, step and foster relationships), in-laws, grandparents, grandchildren and siblings.
Knowing breaches are excluded
Claims arising from intentional damage, from knowingly acting against a law, a resolution or an instruction, or from another knowing breach of duty are excluded (A-7.1). The model text does not say that a final judgment must come first. It charges no insured person with the conduct of other members of the board or management, so each person is judged separately. How an insurer must prove intent is a question for your wording; see the court decisions in the section on financial pressure.
The focus is the EU
Claims before courts outside the EU and under the law of non-EU states are excluded, as is damage from breaches of non-EU law and the enforcement of judgments issued outside the EU (A-7.5). Subsidiaries are insured only if their seat is in an EU member state, and new subsidiaries only after notice and the insurer's consent in text form (A-4). A claim brought before a US court, or under US law, falls outside this model wording.
One sum insured for everything
The sum insured is the maximum for each insured event and for all events in one policy period, and defence costs count against it (A-6.4). Several claims from one breach, or from connected breaches, count as one insured event (A-6.6). All insured persons share the limit. A separate default deductible in the model applies only to board members of stock corporations (A-6.5).
Other exclusions, and what stays silent
The model excludes claims to repay salary, bonuses and profit shares (A-7.2), damage caused by products or services the company placed on the market (A-7.3), damage arising from contractual penalties, bail or deposits, fines, penal compensation and punitive damages imposed on or taken over by the company or a subsidiary (A-7.10), and matters that were already pending when the contract began (A-7.17). It insures claims under statutory liability provisions (A-1). It neither lists nor excludes taxes, social-security contributions and payments after illiquidity or over-indebtedness, so each policy has to say where it stands.
Ask your insurer in writing whether the policy answers each question in the traffic-light check: internal claims and the shareholding deduction, payments after illiquidity or over-indebtedness, taxes and social security, the trigger and the reporting period, and what happens if the company files for insolvency. A written answer is worth more than a model wording, and more than a web page, including this one.
What to have ready before you ask for a D&O quote
A D&O quote is only as good as the facts behind it. Insurers ask who owns the company, who manages it and what has happened so far. With these answers ready, the check is faster and the quotes can be compared.
Who owns it, and who runs it
Legal form, shareholders and their stakes, the number of managing directors, subsidiaries with their locations, and any foreign parent or investor. Revenue, employees and the balance sheet total.
What you have now
The current D&O policy with its schedule and conditions, the end date and the reporting period, and any notices of circumstances already given.
What has happened so far
Claims, letters from authorities, disputes with shareholders or customers, and any financial difficulty in recent years. Insurers ask, and the answers decide what a new policy excludes.
Typical application questions
- Shareholders, their stakes and relatives who hold shares
- Number of managing directors and supervisory bodies, and subsidiaries with their seats
- Revenue, employees and balance sheet total
- Pending or threatened claims, investigations and official letters
- Known circumstances that could lead to a claim, and any financial difficulty
A claim that arrives after the policy ended
D&O is written on a claims-made basis, and that is where a change of insurer can go wrong. The example follows one decision through four dates: the decision, the warning, the change of insurer and the claim. The company and the dates are invented.
Example Precision Parts GmbH, 60 employees, has three shareholders and one managing director. The company and all dates are invented to show the mechanism. They do not describe a real customer, and which policy responds in a real case depends on the wordings and the facts.
The timeline
Year 1, 15 March: the decision
The managing director signs a supply contract at a fixed price without asking the shareholders, although the articles of association require their approval for contracts of this size.
Year 1, 10 September: the warning
The finance team reports that the contract loses EUR 30,000 a month. The shareholders have not yet been told.
Year 2, 1 January: a new insurer
The company changes its D&O insurer. The application asks about known circumstances that could lead to a claim. The managing director knows about the loss-making contract and the missing approval.
Year 2, 20 May: the claim
The shareholders resolve under section 46 no. 8 GmbHG that the company claims EUR 400,000 from the managing director.
Which policy responds
With claims-made cover, what counts is the date of the claim, so the policy in force on 20 May of year 2 is the new one. The new policy excludes breaches that the managing director already knew of when it started (A-5.2 in the GDV model), and the application asked about them, so the claim is probably not covered there. The old policy responds only if a notice of circumstances was given before it ended (A-5.4), or if the claim falls into its reporting period (A-5.3).
What to do
Before the change, report the circumstances to the old insurer in writing while its policy runs, and ask what a notice has to contain. Tell the new insurer what it asks about (section 19 VVG). Ask both insurers in writing how the claim would be treated, and do not cancel the old policy before the new cover is confirmed.
Sources: what we checked, and when
The facts on this page rest on the sources below. The statutes, the GDV model wording for D&O insurance and the court reports were read on 30 October 2026, except section 19 VVG, which was read on 29 October 2026. The three BGH decisions are known to us from reports by law firms and legal news, not from the full judgments. The thresholds in the traffic-light table are our own consulting grid, not taken from a source.
Amounts, dates and companies in examples are invented.
Abbreviations: BGB = Civil Code; GmbHG = Act on Limited Liability Companies; InsO = Insolvency Code; StaRUG = Act on the Stabilisation and Restructuring Framework for Companies; AO = Fiscal Code; StGB = Criminal Code; BSIG = Act on the Federal Office for Information Security; AktG = Stock Corporation Act; VVG = Insurance Contract Act; BGH = Federal Court of Justice; GDV = German Insurance Association.
| Topic | What we found | Source and date checked |
|---|---|---|
| Liability of managing directors to the company | Section 43 GmbHG: care of a prudent businessperson; liability to the company for damage, jointly and severally with other responsible directors; payments contrary to section 30 and the acquisition of own shares contrary to section 33 are named cases; a shareholders' resolution does not release the director where compensation is needed to satisfy creditors; claims become time-barred after five years. | GmbHG section 43 (German); checked 30 October 2026 |
| Who decides on claims against managing directors | Section 46 no. 8 GmbHG: the shareholders decide on pursuing the company's compensation claims against managing directors and on how the company is represented in lawsuits against them. | GmbHG section 46 (German); checked 30 October 2026 |
| Duty to file for insolvency | Section 15a InsO: filing without culpable delay, at the latest three weeks after illiquidity and six weeks after over-indebtedness. In a company without a managing director, each shareholder must also file, unless unaware of the situation. Intentional late, missing or incorrect filing: up to three years or a fine; negligent: up to one year or a fine. | InsO section 15a (German); checked 30 October 2026 |
| Payments after illiquidity or over-indebtedness | Section 15b InsO: no payments after illiquidity or over-indebtedness unless consistent with the care of a prudent and conscientious manager. Ordinary-course payments that keep the business running are generally treated as consistent, during the filing period only while the directors work diligently to remove the insolvency or prepare a filing. After the deadline has passed, payments are generally not consistent. Reimbursement to the company, limited to the creditors' smaller loss; no release by a shareholders' resolution where the money is needed for creditors; payments to shareholders that had to cause illiquidity; limitation of five years, ten if listed at the time of the breach. | InsO section 15b (German); checked 30 October 2026 |
| Early-warning duty | Section 1 StaRUG: the managing body must continuously monitor developments that could threaten the company's continuation and, once it recognises such developments, take suitable countermeasures, report promptly to the supervisory bodies and involve other responsible bodies. | StaRUG section 1 (German); checked 30 October 2026 |
| Liability for company taxes | Section 69 AO with sections 34 and 35 AO: personal liability of the managing director for intentional or grossly negligent breaches, for tax claims that are not assessed or not paid in time, for wrongful refunds and for late-payment surcharges. | AO section 69 (German); checked 30 October 2026 |
| Withheld social-security contributions | Section 266a(1) StGB: an employer who withholds employees' social-security contributions faces up to five years in prison or a fine. Section 14(1) no. 1 StGB attributes the employer's characteristics to the members of the representative body of a legal entity. | StGB sections 266a and 14 (German); checked 30 October 2026 |
| NIS2 duties of the management | Section 38 BSIG: the management must implement the security measures and oversee their implementation, and is liable to its entity for damage caused through fault if it breaches that duty, under the company-law rules of the legal form; it must also be trained regularly. | BSIG section 38 (German); checked 30 October 2026 |
| Mandatory deductible | Section 93(2) AktG: the mandatory D&O deductible applies to stock corporations, not to a GmbH. | AktG section 93 (German); checked 30 October 2026 |
| German model wording for D&O insurance (non-binding): who, what, trigger and time | For optional use; periods and percentages are left blank. Insures current and former members of the management bodies for financial loss from breaches of duty, under statutory liability provisions (A-1). Insured event: the first written assertion of a claim during the policy period or the reporting period (A-2). Indemnity by the company (A-3). Subsidiaries with an EU seat; new subsidiaries after notice and the insurer's consent in text form (A-4). Earlier breaches covered unless known, and known includes recognised as possibly wrong (A-5.2). Reporting period; an extra period can be bought, must be requested within one month and is not available if the contract ends after an insolvency application (A-5.3). Notice of circumstances (A-5.4). After an insolvency application, cover is limited to breaches up to the filing (A-5.5). | GDV model wording: D&O (German); checked 30 October 2026 |
| German model wording for D&O insurance (non-binding): limits, deductible and exclusions | Defence costs in criminal proceedings at statutory (RVG) fees or higher agreed fees if the insurer requested or approved the counsel (A-6.1). Deduction for the stake held by the insured person or relatives, with no threshold (A-6.3). Sum insured per insured event and per policy period, with defence costs counting against it (A-6.4). Deductible for management board members of stock corporations, with percentage and multiple left blank in the model (A-6.5). Series of claims as one insured event (A-6.6). Exclusions: knowing breaches (A-7.1), repayment of benefits (A-7.2), products and services (A-7.3), non-EU courts and law (A-7.5), contractual penalties, fines and punitive damages imposed on the company (A-7.10), matters pending at the start (A-7.17). Taxes, social-security contributions and payments after illiquidity or over-indebtedness are neither listed nor excluded. | GDV model wording: D&O (German); checked 30 October 2026 |
| BGH, 18 November 2020 (IV ZR 217/19) | A claim under the former section 64 sentence 1 GmbHG fell under the damages clause of the wording before the court. The provision was repealed on 1 January 2021 and moved into section 15b InsO. The decision is not a ruling on section 15b. | Flick Gocke Schaumburg (German, 14 April 2021); checked 30 October 2026 |
| BGH, 18 December 2024 (IV ZR 151/23) | A clause that ended a D&O contract automatically at the end of the insurance period in which an insolvency application is filed is invalid (section 307 BGB), partly because it conflicts with the minimum notice period of one month (section 11 VVG). The case concerned an administrator's claim of about EUR 869,000 for payments made after insolvency and was sent back to the Higher Regional Court Frankfurt. | beck-aktuell (German, 20 January 2025); Haufe (German, 18 February 2025); checked 30 October 2026 |
| BGH, 19 November 2025 (IV ZR 66/25) | GmbH with a sole managing director, former section 64 sentence 1 GmbHG. The exclusion for knowing breaches needs positive knowledge that relates to the specific breach that caused the liability. A late insolvency filing alone does not show a knowing breach of the payment ban, each payment is assessed separately, and conditional intent is not enough. Two law firms add that the insurer has to prove the subjective requirements for each payment. The decision concerns the former section 64 GmbHG; whether the same applies under section 15b InsO is open. | Rödl (German, 24 February 2026); Gleiss Lutz (German, 5 December 2025); Luther (English, 23 March 2026); checked 30 October 2026 |
| BGH decisions on section 15b itself | We know of no BGH decision on section 15b itself. | Own search of law-firm reports and legal news; 30 October 2026 |
| Duty to disclose when applying for insurance | Section 19 VVG: the applicant must disclose the risk-relevant circumstances known to the applicant that the insurer asks about in text form. A breach can allow the insurer to withdraw from the contract, to terminate it or to adjust it. | VVG section 19 (German); checked 29 October 2026 |
Consulting information, not legal advice. Laws, court decisions and market practice change, which is why this page carries a date.
Sources
- GmbHG section 43: liability of managing directors (German)
- GmbHG section 46: tasks of the shareholders (German)
- GmbHG in English (translation, status Oct 2024; only the German text is binding)
- InsO section 15a: duty to file for insolvency (German)
- InsO section 15b: payments after illiquidity or over-indebtedness (German)
- StaRUG section 1: early-warning duty (German)
- AO section 69: liability of representatives (German)
- StGB section 266a: withholding of employees' contributions (German)
- StGB section 14: acting for another (German)
- BSIG section 38: duties of the management (German)
- AktG section 93: mandatory deductible (German)
- VVG section 19: duty to disclose (German)
- GDV model wording: D&O insurance, AVB D&O (German, status October 2026)
- Flick Gocke Schaumburg: BGH on D&O cover for payments after illiquidity or over-indebtedness (14 April 2021, German)
- beck-aktuell: BGH on the end of D&O cover on insolvency (20 January 2025, German)
- Haufe: no immediate end of D&O cover on insolvency (18 February 2025, German)
- Rödl: late filing and D&O cover (24 February 2026, German)
- Gleiss Lutz: BGH and loss of D&O cover (5 December 2025, German)
- Luther: BGH of 19 November 2025 on loss of D&O cover in insolvency (23 March 2026, English)
D&O insurance for GmbH directors: frequently asked questions
Short answers to the questions we hear most from managing directors, owner-managers and investors of German companies that work in English.
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