A Warsaw-based technology company receives a creditor's demand letter on a Friday afternoon. By Monday, the board is facing personal liability claims exceeding PLN 5 million. The directors assume their D&O policy covers everything. It does not.

Directors and officers (D&O) insurance in Poland covers personal liability arising from wrongful acts in a management capacity – but coverage gaps are common and often discovered only after a claim is filed. Polish corporate legislation imposes strict personal liability on board members for insolvency filing failures, tax arrears, and regulatory breaches. A policy that does not align with these specific statutory triggers may leave directors entirely unprotected at the moment they need coverage most.

This alert identifies the three areas where Polish directors most frequently find their D&O policies inadequate, explains who is affected and at what thresholds, and sets out immediate steps boards should take now.

What gaps in D&O coverage expose Polish directors to personal liability?

Polish corporate law under the Kodeks spółek handlowych (Commercial Companies Code, KSH) imposes direct personal liability on board members for company obligations in defined circumstances. Standard D&O policies – particularly those drafted on Anglo-American templates – often fail to map onto these Polish-specific triggers. The result is a coverage illusion: the policy exists, but the claim falls outside its scope.

Three gaps appear repeatedly in practice. First, many policies exclude claims arising from insolvency-related conduct. Yet insolvency law in Poland requires board members to file for insolvency within 30 days of the company becoming insolvent. Missing that deadline triggers personal liability for the full amount of the company's unsatisfied obligations – a figure that can easily exceed PLN 10 million in mid-sized companies. If the policy excludes insolvency-adjacent conduct, the director bears that exposure alone.

Second, tax liability exclusions are common. Under Polish tax legislation, board members are jointly and severally liable for a company's tax arrears when enforcement against the company fails. The National Revenue Administration (Krajowa Administracja Skarbowa, KAS) can pursue directors personally for amounts with no upper statutory cap. Policies that exclude "regulatory" or "governmental" claims frequently sweep this liability outside coverage.

Third, white-collar defence costs – criminal defence fees, investigative costs, and regulatory proceedings – are often sublimited or excluded entirely. A KAS audit escalating to a criminal fiscal investigation can generate defence costs of PLN 200,000 or more before any judgment is reached. Directors in companies with annual turnover above PLN 50 million face this risk most acutely.

  • Insolvency filing liability – 30-day statutory deadline, unlimited personal exposure
  • Tax arrears liability – no statutory cap, KAS enforcement against directors personally
  • White-collar defence costs – frequently sublimited below actual defence spend
  • Pre-pack restructuring conduct – often excluded as "intentional acts"
  • Cross-border claims – multi-jurisdiction boards face gaps in territorial coverage

For boards involved in cross-border insolvency involving Poland and Hungary, the territorial scope of the policy deserves particular scrutiny. A policy governed by English law may not respond to Polish statutory liability triggers in the way the insured expects.

Who is affected – and what thresholds trigger immediate review?

Not every board faces equal exposure. The risk profile depends on company size, sector, and the specific statutory duties applicable to the board. However, three thresholds indicate that an immediate policy review is warranted – and that delay forfeits the opportunity to correct coverage before a claim arises.

We secured a reversal of a personal liability finding for a manufacturing client in the Mazowieckie region (autumn 2025), where the director's D&O policy had excluded insolvency-related conduct. The exclusion had been present since policy inception – unnoticed for four years. The claim exceeded PLN 3 million. Early policy review would have allowed renegotiation of that exclusion at renewal.

The first threshold is balance-sheet insolvency. A company whose liabilities exceed its assets triggers the statutory insolvency filing obligation immediately. Board members who continue trading beyond that point without filing face personal liability for all obligations incurred after the threshold was crossed. Any director of a company with a debt-to-asset ratio above 1.0 should treat their D&O policy as a priority matter.

The second threshold is tax arrears exceeding PLN 500,000. At that level, KAS enforcement against the company is typically accompanied by parallel proceedings against board members personally. The KAS maintains a public register of entities with significant tax arrears. Directors of companies appearing on that register – or at risk of appearing – need to confirm that their policy covers tax liability claims without a sublimit that renders the coverage nominal.

The third threshold applies to companies subject to AML obligations under Polish anti-money laundering legislation. Boards of obligated institutions face regulatory liability that standard D&O policies may not cover. For a detailed overview of those obligations, see our analysis of AML compliance obligations for Polish companies.

Foreign directors on Polish supervisory boards face an additional complexity. Their personal liability under Polish corporate law is governed by Polish statute regardless of their nationality or residence. A policy placed in their home jurisdiction may not respond to a Polish statutory claim. Our team obtained interim asset protection measures for a German investor's supervisory board member in Lower Silesia (spring 2026), where the gap between the German-placed policy and Polish statutory exposure exceeded EUR 2 million.

What should Polish directors do now?

The window for corrective action is the policy renewal cycle. Once a claim is notified – or circumstances arise that may give rise to a claim – the policy is fixed and coverage gaps cannot be remedied. Directors who identify a gap after a claim is filed have no practical recourse against their insurer for that gap. The consequence is irreversible: personal assets become the only available resource.

Three immediate steps apply to any board with exposure above the thresholds identified above. First, obtain the policy wording – not the summary – and review the insolvency exclusion, the regulatory claims definition, and the territorial scope. This review should be completed within 30 days of the next board meeting at which financial position is discussed.

Second, confirm that the policy limit is adequate relative to the company's actual liability exposure. A PLN 2 million limit is standard in mid-market policies. For a company with tax arrears risk or insolvency exposure above that figure, the limit provides only partial protection. Side-A coverage – which protects directors personally when the company cannot indemnify them – should be a separate, ringfenced limit.

Third, for companies in or approaching restructuring, confirm whether the policy covers conduct during a postępowanie restrukturyzacyjne (restructuring procedure) or pre-pack arrangement. Insurers frequently argue that restructuring conduct constitutes an "intentional act" excluded from coverage. That argument is incorrect under Polish law in most circumstances – but disputing it requires white-collar defence resources that the policy may not fund. For context on cross-border restructuring exposure, see our analysis of cross-border insolvency involving Poland and Ukraine.

What to prepare before your next policy renewal:

  • Full policy wording including all exclusions and endorsements
  • Current balance sheet showing debt-to-asset ratio
  • Confirmation of any open KAS proceedings or tax arrears
  • List of all jurisdictions in which board members hold directorships

Boards that complete this review before renewal can negotiate exclusion carve-outs, increase Side-A limits, and add defence cost coverage for regulatory and criminal proceedings. Boards that do not complete it before a claim arises cannot.

Your company's specific situation – its financial position, sector, and the composition of its board – determines which gaps are most dangerous. Waiting until a claim is filed precludes any meaningful correction.

To receive an expert assessment of your D&O coverage gaps and board liability exposure, contact info@kordeckipartners.com. We will review your policy wording, map it against your statutory exposure under Polish corporate and insolvency law, and identify the steps needed before your next renewal.

Frequently asked questions

Q: Does a standard D&O policy cover the 30-day insolvency filing obligation under Polish law?

A: Many standard policies exclude claims "arising from or related to insolvency proceedings." This exclusion is broad enough to capture liability for failing to file within the statutory 30-day period. Directors should request a specific carve-out confirming that the policy responds to personal liability claims arising from a delayed or omitted insolvency filing. Without that carve-out, the most common source of personal liability for Polish directors may be entirely outside coverage.

Q: How long does it take to renegotiate D&O policy terms at renewal?

A: Renegotiation typically requires 60 to 90 days before the renewal date to allow for underwriter review, endorsement drafting, and premium adjustment. Directors who identify a gap less than 30 days before renewal will generally be unable to correct it for the current policy period. The practical consequence is that gap identification must happen at least one quarter before the renewal date.

Q: Is it a misconception that D&O insurance covers all management decisions?

A: Yes. D&O insurance covers wrongful acts – broadly defined – but subject to exclusions that frequently remove the most significant Polish liability triggers from coverage. Tax liability claims, insolvency-related conduct, and criminal proceedings are commonly excluded or sublimited. The policy does not function as a blanket indemnity for all board decisions. Directors who assume otherwise discover the gap only after a claim is filed, at which point the coverage position is fixed.

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. 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.