Directors & Officers Liability Insurance 2025 Update
South Korea’s National Assembly passed a significant corporate governance reform bill on July 3, 2025 that is designed to increase transparency in capital markets and to strengthen protections for minority shareholders. A key feature of the bill expands the fiduciary duties of executives to act in the interests of the company but also its shareholders thereby enhancing minority shareholder rights. Undoubtably, the reform bill will increase the number of shareholder lawsuits and, therefore, directors’ and officers’ liability risk.
While D&O is managed and purchased by the company, the coverage protects your personal assets from management liability claims. If you are a director, officer, or executive of a public company in Korea, it is recommended that you review your company’s directors’ & officers’ liability insurance policy (D&O) and ensure that the coverage is up to date and includes the language enhancements that are currently available from insurers. Additionally, start the renewal process early so there is adequate time for negotiation and evaluation of coverage options. And to help with your review and planning, below are some key trends to consider:
- D&O liability risk in Korea is increasing due to rising shareholder activism, employment related issues, and new governance and safety regulations.
- The global D&O insurance market has been softening which means that insurers are offering more competitive renewal premium pricing, lower deductibles, and favorable policy language upon policy renewals. This is an opportune time to negotiate away Y2K, SAPA, and Regulatory exclusions that have been left on Korea D&O policies for far too long.
- Relatedly, a lingering effect of Covid-19 are insolvency exclusions that were added to D&O policies when economic uncertainties were peaking. Now that the pandemic is well over and Korea firms have weathered the pandemic related financial headwinds, removing these exclusions should be a renewal goal.
- Increasing claim frequency and severity around the world and in Korea are driving executives to ensure they have adequate protection from a wide range of issues: event-driven litigation, merger objection lawsuits, securities class-action suits, and employment related issues like harassment, wrongful termination, diversity, discrimination, and work from home practices.
- Firms with international operations are experiencing heightened legal exposures due to expanding laws and regulations across the world as well as enhanced cross-border cooperation among regulators. To address this risk, a multinational D&O insurance program needs to be tailored to meet the specific insurance and indemnity regulations in each country of operation.
- Underwriters have a heightened focus on ESG issues as climate disclosure rules in the US and other countries will have D&O consequences including deeper ESG questions from underwriters and more securities litigation. Due to pressure from activists and investors, the SEC in the US requires organizations to report their direct greenhouse emissions and indirect emissions from the purchase of electricity or other types of energy.
- Cyber risk is a major topic with underwriters being concerned about companywide cyber risk exposure and management’s resiliency actions and response plans. Cyber risk is an ever-evolving risk that causes a variety of significant consequences to organizations that experience a cyber event. In the US, the SEC has new guidelines for board disclosures on cyber risk and risk management. ARIA will be monitoring other country regulators to see if they take a similar approach.
- Directors and officers have much to consider when preparing for an IPO and one key task is securing adequate D&O liability insurance coverage. It is common for D&O insurance policies in Korea to contain an IPO exclusion so this needs to be addressed early in the IPO process and consideration should be given to purchasing higher limits. Alternatively, a stand-alone Prospectus Liability Insurance policy can be considered to ringfences the high-risk IPO process, but this is not common practice in Korea.
- Related to the above, there is a limited number of insurers who are willing to underwrite SPAC IPO risk. Insurers are concerned about the number of “creative SPAC lawsuits” that have already been filed and are raising premiums accordingly. However, new capacity is cautiously entering the market so premium rates should begin to plateau and, if a warranty & indemnity (W&I) / representations & warranties (RWI) insurance policy is placed for the SPAC transaction, D&O underwriters view this as a higher level of deal team diligence and sophistication so will offer more favorable D&O premium pricing.
- To lock in policy improvements during the renewal process, start D&O renewals early, develop a renewal marketing strategy, and consider seeking quotations from competitive insurers. Preparation is critical, an organization needs to be able to clearly and confidently “sell” its risk to underwriters so engage experienced advisors to assist with risk advocacy.
- Lastly, keep in mind that all insurance policies are legal contracts, so the words matter and need to be reviewed carefully each year. This is especially true for D&O policies in Korea as the policy wordings vary widely amongst insurers.
Your company’s D&O insurance policy should be reviewed and updated every year as it protects your personal assets, a broadly worded D&O policy should be an important part of your family’s wealth risk management plan.

For more information regarding D&O risk and insurance, contact:
Eric Hoffman
Asia Risk & Insurance Advisors
M: +82-10-2267-2788
E: eric.hoffman@asiariskadvisors.com