A Warsaw-based technology company appoints a new supervisory board member. Within six months, a minority shareholder files a claim alleging that a board resolution caused measurable financial harm. The director has no personal indemnity agreement, no insurance policy, and no clear understanding of where personal liability ends and company responsibility begins. That gap – between assumption and exposure – is where D&O claims are born.

Directors and officers (D&O) insurance covers personal liability arising from managerial decisions made in good faith. Under Polish corporate legislation, board members of limited liability companies (spółka z ograniczoną odpowiedzialnością, sp. z o.o.) and joint-stock companies (spółka akcyjna, S.A.) face personal liability for damages caused to the company, shareholders, and third parties. A D&O policy transfers that financial exposure – typically up to the policy limit, which in the Polish market commonly ranges from PLN 5m to PLN 50m – to an insurer, covering defence costs and indemnity payments.

This guide walks through the structure of D&O coverage relevant to Polish directors, the procedural steps to assess and obtain adequate protection, the most common coverage gaps, and three business scenarios illustrating how the policy responds under real-world conditions. The guide also addresses cross-border considerations for directors sitting on boards of Polish subsidiaries within multinational groups.

Why does board liability arise under Polish law?

Polish corporate legislation creates several overlapping liability regimes. Board members of an sp. z o.o. face direct personal liability to creditors when the company becomes insolvent and they fail to file for insolvency within 30 days of meeting the statutory threshold. That 30-day clock starts running automatically – no creditor notice is required. Missing it forfeits the director's primary statutory defence and opens the door to personal enforcement against private assets.

Beyond insolvency, liability arises from breach of fiduciary duty, unlawful payment of dividends, and defective financial statements. The National Court Register (Krajowy Rejestr Sądowy, KRS) records directorial appointments, and registration creates a public presumption of awareness of all company obligations. The Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) separately supervises directors of regulated entities – failures in that context can trigger administrative sanctions on top of civil claims. The National Revenue Administration (Krajowa Administracja Skarbowa, KAS) may also pursue board members personally for unpaid company tax liabilities exceeding PLN 1,000.

Three liability triggers dominate D&O claims in Poland. First, shareholder derivative actions following failed acquisitions or restructuring decisions. Second, KAS enforcement proceedings against directors for company tax arrears. Third, creditor claims in insolvency, where the trustee pursues board members for losses caused before filing. Each trigger maps differently onto a D&O policy – which is precisely why coverage structure matters as much as coverage limit.

  • Insolvency filing default – personal liability for full unsatisfied creditor claims
  • Tax arrears enforcement – KAS pursues board members directly for company debts
  • Shareholder derivative actions – often arise from M&A or restructuring decisions
  • Regulatory sanctions – KNF proceedings in financial services and capital markets
  • Third-party tort claims – suppliers and counterparties damaged by board decisions

We secured a reversal of personal tax liability enforcement exceeding PLN 3m for a manufacturing client's former management board member in the Mazowieckie region (autumn 2025). The case turned on demonstrating that the filing default fell within a force-majeure exception under insolvency law. Without D&O coverage in place, the director had faced immediate enforcement against personal real estate assets.

What does a Polish D&O policy actually cover?

A standard D&O policy in Poland has three insuring agreements. Side A covers individual directors and officers when the company cannot or will not indemnify them – the most critical protection in insolvency scenarios. Side B reimburses the company when it has already indemnified a director. Side C, less common in Polish practice, covers the company itself for securities claims. For directors of non-listed companies, Side A is the operative coverage in most disputes.

Defence costs are typically covered from the moment a claim or investigation is notified – not from the moment a judgment is entered. That distinction matters enormously. Polish white-collar defence proceedings, including KAS audits and KNF investigations, generate substantial legal fees before any liability is established. A policy that covers defence costs from day one protects cash flow during the most stressful phase of a proceeding. Policies that defer coverage until a formal demand is issued leave directors exposed for months.

Coverage exclusions deserve careful attention. Most Polish market policies exclude claims arising from deliberate fraud, personal profit obtained unlawfully, and bodily injury. Critically, many standard policies exclude claims arising from insolvency-related duties – the very scenario most likely to trigger personal liability under Polish law. Directors in companies carrying significant debt should verify whether their policy contains a carve-back restoring coverage for insolvency-adjacent decisions made before the company became insolvent.

Policy triggers are either "claims-made" or "occurrence-based." Almost all D&O policies in Poland operate on a claims-made basis. Coverage applies when the claim is first made during the policy period, regardless of when the underlying act occurred. A director who resigned two years ago but receives a claim today is covered only if the current policy – or a prior policy with an extended reporting period – was in force when the claim arrived. That retroactive exposure is one of the most misunderstood features of D&O insurance in the Polish market.

For directors involved in cross-border insolvency involving Poland and Cyprus, coverage analysis becomes more complex. A policy issued in Poland may not respond to claims brought in a Cypriot court, and vice versa. Multi-jurisdictional policies or follow-form endorsements are required where a director sits on boards in multiple jurisdictions simultaneously.

How should directors assess coverage adequacy?

Coverage adequacy depends on three variables: the company's size and sector, the director's personal exposure profile, and the policy's structural features. A director of a mid-sized Polish manufacturer with PLN 80m in annual revenue faces a materially different risk profile than a director of a regulated fintech with KNF oversight. Policy limits that appear sufficient on paper may be exhausted by defence costs alone before any indemnity payment is made.

Start with a liability mapping exercise. Identify every legal regime under which the director can be personally pursued: corporate law, tax law, labour law, environmental law, and sector-specific regulation. For directors of companies with ESG reporting obligations under the Corporate Sustainability Reporting Directive (CSRD), consider whether ESG compliance in Poland creates additional regulatory exposure that the policy must cover. CSRD-related claims against directors are an emerging exposure class in Polish practice.

Check the sublimit structure. Many policies impose sublimits on specific claim types – defence costs, regulatory investigations, and crisis management expenses often carry lower sublimits than the headline policy limit. A PLN 20m policy with a PLN 500,000 sublimit on regulatory investigation costs provides inadequate protection if a KAS audit escalates into criminal proceedings. Negotiating removal or uplift of those sublimits adds relatively modest premium in exchange for substantially improved protection.

  • Confirm the retroactive date covers the director's full tenure
  • Verify that insolvency-related claims carry a carve-back, not a blanket exclusion
  • Check sublimits on defence costs and regulatory investigations separately
  • Confirm multi-jurisdictional coverage if the director sits on foreign boards

Our team obtained interim measures protecting personal assets worth over EUR 4m for a German investor's subsidiary director in Lower Silesia (spring 2026). The proceeding arose from a restructuring decision that a minority shareholder characterised as a breach of fiduciary duty. The director's D&O policy covered defence costs in full; without it, the interim measure application alone would have required personal funding exceeding PLN 400,000.

To receive an expert assessment of your D&O coverage gaps and personal liability exposure under Polish law, contact info@kordeckipartners.com.

What are the common mistakes directors make with D&O coverage?

The most consequential mistake is treating D&O insurance as a company procurement decision rather than a personal protection decision. When the company selects the cheapest available policy to satisfy a governance checkbox, individual directors inherit the coverage deficiencies. Directors have an independent interest in reviewing policy terms – and the right to request that a personal lines D&O policy be purchased alongside the company policy if the company-level coverage is inadequate.

Notification failures are the second major mistake. Claims-made policies require timely notification of circumstances that might give rise to a claim, not just formal demands. A director who becomes aware of a KAS investigation in March but fails to notify the insurer until September – after the policy has renewed – may find the claim treated as arising under the new policy period, with a fresh deductible and potentially different terms. Polish insurance law imposes strict notification obligations; missing them can void coverage entirely.

Directors in corporate groups frequently assume that the parent company's group D&O policy covers them as subsidiary directors. That assumption is often wrong. Group policies typically cover the parent entity's board; subsidiary directors are covered only if the subsidiary is listed as an insured entity. For subsidiary liability in Polish corporate groups, the exposure runs in both directions – upward to the parent and downward to creditors – making standalone subsidiary coverage essential.

Finally, directors approaching retirement or resignation frequently allow coverage to lapse. A director who resigned in 2024 can still be sued in 2027 for decisions made during their tenure. An extended reporting period endorsement – typically available for 12 to 60 months after policy expiry – preserves coverage for post-resignation claims. The cost is modest relative to the exposure. Failing to purchase this endorsement is an irreversible mistake once the policy period closes.

Three business scenarios: how coverage responds in practice

Polish D&O claims do not arrive uniformly. Understanding how a policy responds across different business contexts helps directors calibrate both coverage structure and personal risk management. Three scenarios – manufacturing restructuring, IT services, and foreign investor subsidiary – illustrate the most common claim patterns in the Polish market.

Manufacturing restructuring. A board of a mid-sized manufacturer in Silesia initiates a pre-pack insolvency (przygotowana likwidacja) to sell the operating business to a strategic buyer. A group of unsecured creditors challenges the transaction, alleging that the board deliberately undervalued assets to benefit a connected buyer. The claim is filed against individual directors personally, seeking PLN 12m in damages. Side A coverage responds immediately, funding defence counsel and expert valuation reports. The policy limit of PLN 15m proves sufficient to cover both defence costs and a negotiated settlement. Without D&O coverage, personal enforcement against director assets would have begun within 90 days of the claim filing.

IT services company. A Warsaw-based software company undergoes a management buyout. Following the transaction, the selling shareholders allege that the management board concealed material liabilities during due diligence, constituting a breach of disclosure obligations. The claim amount is EUR 3m. The D&O policy covers the defence and ultimately the settlement. The critical feature: the policy's retroactive date extended back five years, covering decisions made during the pre-sale period. A policy with a two-year retroactive date would have left the directors unprotected for the most relevant period.

Foreign investor subsidiary. A German parent company appoints two German nationals to the supervisory board of its Polish S.A. subsidiary. Following a failed acquisition by the subsidiary, the Polish minority shareholder brings a derivative action in Warsaw, alleging breach of supervisory duty. The parent's German D&O policy does not respond to claims brought in Polish courts. The subsidiary has no standalone Polish D&O policy. The two supervisory board members face personal exposure exceeding PLN 8m with no insurance coverage in place. This scenario – entirely avoidable with a PLN 30,000 annual premium – represents the single most preventable D&O gap in the Polish market for multinational groups.

Across all three scenarios, the common thread is preparation time. D&O policies take two to six weeks to bind, require financial information about the company, and must be in place before a claim arises. Purchasing coverage after a dispute has begun is not possible. That irreversibility is the defining feature of D&O risk management.

Specific situations require tailored coverage analysis. To discuss how D&O insurance applies to your board position and company structure, email info@kordeckipartners.com.

Frequently asked questions

Q: Does D&O insurance cover a director's personal liability for company tax arrears pursued by the KAS?

A: Most standard D&O policies in Poland cover defence costs in KAS proceedings directed personally at board members, including the cost of legal representation during audits and appeals before the administrative courts (WSA and NSA). Whether the policy indemnifies the underlying tax liability itself depends on policy wording – many policies treat tax liabilities as a form of disgorgement and exclude them from indemnity. Directors should negotiate an explicit endorsement confirming that KAS enforcement defence costs are covered without sublimit. The threshold for personal KAS liability is company tax arrears exceeding PLN 1,000, making this a near-universal exposure for Polish board members.

Q: Is it a misconception that a supervisory board member has less D&O exposure than a management board member?

A: Yes – this is one of the most common misconceptions in the Polish market. Supervisory board members of a joint-stock company carry personal liability for failure to exercise adequate oversight, particularly in the context of financial reporting and related-party transactions. Polish corporate legislation explicitly extends liability to supervisory board members who approved defective financial statements. In practice, derivative actions and insolvency trustee claims increasingly name supervisory board members alongside management board members. Any person holding a formal board position – whether executive or supervisory – requires D&O coverage calibrated to their specific oversight duties.

Q: How long does it take to obtain D&O coverage and what does it typically cost?

A: Binding a D&O policy for a Polish company typically takes two to six weeks from submission of the insurance application, which requires two to three years of audited financial statements, a description of the company's business activities, and details of any pending claims or investigations. Annual premiums for a mid-sized Polish company with a PLN 10m policy limit generally range from PLN 15,000 to PLN 60,000 depending on sector, financial health, and claims history. Companies in regulated sectors (financial services, healthcare, energy) and companies undergoing restructuring typically pay premiums at the higher end of the range. Extended reporting period endorsements for departing directors cost approximately 25 to 50 percent of the annual base premium.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to restructuring, insolvency, and white-collar defence. We work with Polish entrepreneurs, foreign investors, and in-house legal teams navigating board liability exposure, D&O coverage gaps, and insolvency proceedings. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.