A Polish manufacturing company in Silesia enters financial distress. The supervisory board demands answers. Creditors threaten personal claims. Two directors quietly discover that the company's D&O policy – purchased three years earlier and never reviewed – contains a solvency exclusion that voids cover the moment insolvency proceedings are filed. The window to act has already closed.

Directors and officers liability (D&O) insurance protects board members of Polish companies against personal financial exposure arising from their management decisions. Under Polish corporate legislation, directors face unlimited personal liability for company debts when statutory obligations are breached – including the 30-day deadline to file for insolvency under insolvency law. A properly structured D&O policy covers defence costs, settlements, and judgments, but only if the policy wording, exclusions, and notification procedures are aligned with Polish legal requirements before a claim arises.

This guide walks through the structure of D&O cover relevant to Polish directors, the procedural steps for obtaining and maintaining effective coverage, the most damaging policy gaps, and three business scenarios where coverage made – or failed to make – the difference. Readers will also find a practical checklist and answers to the questions clients ask most often.

Why does personal liability exposure matter for directors in Poland?

Polish corporate law creates genuine personal risk. Board members of a spółka z ograniczoną odpowiedzialnością (limited liability company, sp. z o.o.) and a spółka akcyjna (joint-stock company, SA) can be held personally liable for company obligations when they fail to act within statutory deadlines. The National Court Register (KRS) records these appointments publicly, making directors identifiable targets for creditor claims. Personal liability is not theoretical – it is enforceable against private assets.

The 30-day insolvency filing deadline is the most common trigger. Once a company becomes insolvent – meaning it cannot pay its debts as they fall due, or its liabilities exceed assets – the board must file with the district court within 30 days. Missing this deadline exposes each director to personal liability for the full amount of creditor claims that arose after the filing should have been made. That figure can reach tens of millions of Polish zlotys in mid-size companies.

Beyond insolvency, Polish law imposes liability for tax arrears when the company cannot satisfy tax obligations and the director's culpable negligence contributed to that position. The Polish Financial Supervision Authority (KNF) can also pursue directors of regulated entities for governance failures. The Prokuratura (Public Prosecutor's Office) handles white-collar defence cases where criminal liability overlaps with civil exposure. D&O insurance addresses the civil and criminal defence cost layers simultaneously – but only when the policy is structured to do so.

We secured reversal of a personal liability determination exceeding PLN 3.5m for a manufacturing client's director in the Silesia region (autumn 2025). The outcome turned on the existence of a Side A D&O policy that funded the defence from day one, before any corporate indemnity was available.

What does a Polish-compliant D&O policy actually cover?

D&O policies in Poland follow a three-part structure. Side A covers individual directors when the company cannot or will not indemnify them – the most important layer in insolvency scenarios. Side B reimburses the company when it indemnifies its directors. Side C covers the company entity itself for securities claims, though this is less common in non-listed Polish entities. The critical coverage layer for restructuring Poland situations is always Side A.

A well-drafted policy covers four categories of loss. Defence costs are funded as they are incurred – not after a final judgment. Settlements reached with third parties, including creditors, are covered up to the policy limit. Judgments awarded against directors in civil proceedings are covered, subject to exclusions. Investigation costs – including responses to KRS inquiries, KNF investigations, and tax authority (KAS) audits – are covered if the policy includes a regulatory investigation extension.

Policy limits in Poland typically range from PLN 5m to PLN 50m for mid-size companies. Foreign-owned subsidiaries often carry EUR-denominated limits set by the parent's global programme. The retention (deductible) for Side A claims is usually zero – because requiring a director to fund the first PLN 200,000 of defence costs defeats the purpose of the cover. Any retention on Side A should be refused at placement.

  • Side A – individual director cover when company indemnity is unavailable
  • Side B – corporate reimbursement of director indemnification
  • Side C – entity cover for securities claims (listed companies)
  • Regulatory investigation extension – KNF, KAS, and prosecutor inquiries
  • Crisis management costs – PR and forensic accounting in the first 72 hours

One structural point often missed: Polish insolvency law creates a "wrongful trading" equivalent through provisions on culpable continuation of business after insolvency. Pre-pack insolvency (pre-pack) scenarios generate D&O claims precisely because creditors challenge the valuation and process used to transfer assets. Coverage for pre-pack disputes requires an explicit asset sale endorsement – standard policy wording frequently excludes it.

How should Polish directors obtain and maintain effective D&O coverage?

Effective D&O coverage requires four sequential steps: needs assessment, placement, maintenance, and claims response. Each step has a specific timeline. Skipping the needs assessment – the most common mistake – means the policy is placed against a generic risk profile rather than the company's actual exposure. A director who joins a financially stressed company and relies on a policy placed two years earlier for a healthy business is, in practice, uninsured for the most likely claims.

Step 1 – Needs assessment (weeks 1–2). Map the company's legal obligations: corporate governance requirements, tax positions, any ongoing KNF or KAS inquiries, and the state of the balance sheet. Identify whether the company qualifies as insolvent under either the liquidity or balance-sheet test. This assessment determines whether a standard D&O policy is sufficient or whether a distressed-company endorsement is required. A company already in financial difficulty may face a solvency exclusion that voids cover retroactively.

Step 2 – Policy placement (weeks 3–6). Approach at least three insurers active in the Polish market. Polish law does not require competitive tendering for insurance, but the market is concentrated and pricing varies significantly. The placement broker must be instructed to obtain Side A cover with zero retention, a regulatory investigation extension covering KAS and KNF proceedings, and a pre-pack endorsement if any restructuring transaction is contemplated. Policy limits should be stress-tested against the company's total liabilities.

Step 3 – Annual maintenance (ongoing). D&O policies are claims-made instruments. Coverage applies to claims first made during the policy period, regardless of when the underlying act occurred – unless a prior-acts exclusion applies. Review the policy at every renewal. Any material change in the company's financial position, ownership, or regulatory status must be disclosed. Failure to disclose triggers avoidance of the entire policy. Set a 60-day pre-renewal review window.

Step 4 – Claims response (within 72 hours of a claim or circumstance). Polish D&O policies require notification of claims and circumstances promptly – some policies set a 14-day notification deadline. Missing the notification window is the single most common reason claims are declined. Appoint external counsel immediately upon receiving any demand, investigation notice, or supervisory board resolution questioning management decisions. Do not rely on company lawyers whose retainer is paid by the entity – their duty runs to the company, not to individual directors.

What are the most dangerous policy gaps for directors in restructuring situations?

Restructuring Poland scenarios expose three gaps that standard D&O policies do not address. Each gap can render the policy worthless at the moment it is most needed. Directors who understand these gaps can demand endorsements at placement rather than discovering the exclusion when a claim is already live.

Gap 1 – Insolvency exclusion. Many Polish D&O policies contain a clause voiding coverage once formal insolvency proceedings are opened at the District Court. This exclusion is commercially illogical for Side A purposes – the insolvency scenario is precisely when individual directors need personal cover most urgently. Demand a Side A carve-out from any insolvency exclusion. Some London-market and German insurers offer this endorsement as standard; domestic Polish insurers may require negotiation.

Gap 2 – Conduct exclusions applied too broadly. Standard policies exclude claims arising from fraud, wilful misconduct, or personal profit. These exclusions are legitimate. The problem arises when insurers use broad drafting to deny coverage for negligence claims on the basis that the director "should have known" the conduct was improper. Polish courts have not yet developed a consistent body of case law on D&O policy interpretation – which means the policy wording itself carries greater weight than in jurisdictions with settled insurance litigation. Narrow conduct exclusions to final non-appealable adjudications only.

Gap 3 – Related-party and intercompany claim exclusions. Polish corporate groups frequently see claims brought by one group entity against the directors of another – particularly in restructuring when parent companies seek recovery from subsidiary management. Standard policies exclude claims by the insured company or its affiliates against the directors. This exclusion eliminates coverage for the most common source of D&O claims in Polish corporate groups. Negotiate a sub-limit for intra-group claims, or at minimum ensure the exclusion does not apply to Side A.

We obtained interim measures protecting a director's personal assets worth over EUR 2m for a technology client in the Mazowieckie region (spring 2026). The insurer had initially declined the claim on a conduct exclusion. Successful challenge to that denial – based on the "final adjudication" requirement in the policy – restored full coverage within six weeks.

For cross-border insolvency situations involving multiple jurisdictions, the interaction between Polish D&O coverage and foreign liability regimes adds further complexity. Directors of Polish subsidiaries of EU groups face exposure under both Polish and foreign law simultaneously. See our analysis of cross-border insolvency involving Poland and France for the specific issues that arise in Franco-Polish group structures.

What do three business scenarios reveal about D&O coverage in practice?

Three scenarios illustrate how D&O coverage operates – and fails – across the range of situations Polish directors actually face. Each scenario maps to a distinct coverage layer and a distinct common mistake.

Scenario 1 – Manufacturing company in financial distress. A Silesian manufacturing company misses two consecutive debt service payments. The board delays the insolvency filing by 45 days while attempting a private restructuring. Creditors later sue the directors personally for PLN 8m in claims arising during the delay. The company's D&O policy contains a standard insolvency exclusion. Side A coverage is void. The directors fund their defence privately. The outcome: a negotiated settlement costing each director approximately PLN 400,000 from personal assets. The lesson is that the insolvency exclusion must be carved out before distress materialises – not after.

Scenario 2 – IT company with foreign parent. A Warsaw-based IT company is a wholly owned subsidiary of a German group. The parent's global D&O programme nominally extends to Polish subsidiaries. A KNF inquiry into data governance practices triggers a regulatory investigation. The Polish directors notify the German parent's insurer. The insurer argues that the Polish regulatory proceeding falls outside the global programme's territorial scope, which was drafted for EU securities regulators – not the KNF. Coverage is disputed for 14 months. The lesson is that global programmes must be specifically endorsed to cover Polish regulatory proceedings, including KNF, KAS, and the Urząd Ochrony Danych Osobowych (Personal Data Protection Office, UODO).

Scenario 3 – Foreign investor entering Poland via acquisition. A Dutch investor acquires a Polish sp. z o.o. and appoints two Dutch nationals to the management board. No local D&O policy is placed; the acquirer assumes the existing company policy remains valid post-acquisition. The policy contains a change-of-control exclusion that voids coverage automatically upon a majority ownership change. A creditor claim from a pre-acquisition counterparty is filed six months later. Coverage is void. The lesson is that change-of-control exclusions must be identified in due diligence and either waived or replaced with a new policy at closing. The due diligence checklist for any Polish M&A transaction must include D&O policy review. For structuring considerations relevant to cross-border entries, see our guide on arbitration clauses in Polish contracts, which addresses dispute resolution choices that interact with D&O coverage triggers.

A fourth pattern appears repeatedly in Baltic-region group structures. Polish subsidiaries of Lithuanian holding companies carry D&O cover placed in Vilnius under Lithuanian law. When a claim arises in Poland, jurisdiction and governing law disputes delay coverage responses by 12 to 18 months. See our separate analysis of cross-border insolvency involving Poland and Lithuania for the structural issues in Polish-Lithuanian corporate groups.

What these scenarios share is a single failure point: the policy was never reviewed against the company's actual risk profile at the moment the risk crystallised. D&O insurance is not a passive asset. It requires active management at every material change in the company's circumstances.

What should Polish directors prepare before placing D&O cover?

Directors approaching a D&O placement – or renewal – benefit from structured preparation. The insurer's underwriting questionnaire is not a formality. Inaccurate or incomplete answers void the policy under Polish insurance law. Preparation reduces both the risk of voidance and the likelihood of a coverage dispute when a claim arises.

  • Current balance sheet and profit-and-loss accounts for the last two financial years
  • List of all pending or threatened litigation, regulatory inquiries, and tax audits
  • Corporate structure chart showing all subsidiaries, affiliates, and beneficial owners
  • Details of any restructuring transactions, asset sales, or pre-pack procedures contemplated
  • Copies of existing D&O policies, including any group programme extending to Poland

Beyond documentation, directors should resolve three structural questions before placement. First, who are the insured persons? Polish law recognises board members (członkowie zarządu), supervisory board members (członkowie rady nadzorczej), and authorised signatories (prokurenci) as separate categories. Each category carries distinct liability exposure and must be explicitly named or described in the policy schedule. Second, what is the discovery period? A 36-month extended reporting period after policy expiry is standard for run-off coverage when a company is wound up. Third, is the policy governed by Polish law? Policies governed by foreign law create enforcement uncertainty in Polish courts.

Specific D&O situations benefit from specialist legal input at the placement stage – not only at the claims stage. A lawyer familiar with white-collar defence, insolvency, and Polish corporate governance can identify coverage gaps that a generalist insurance broker may miss. The cost of legal review at placement is a fraction of the cost of a coverage dispute after a claim is filed.

Specific situations – particularly those involving pre-pack transactions, cross-border group structures, or ongoing KAS or KNF inquiries – require tailored analysis. To receive an expert assessment of your D&O coverage position, contact info@kordeckipartners.com.

Frequently asked questions

Q: How long does it take to place a D&O policy in Poland, and what does it cost?

A: Placement typically takes four to six weeks from submission of the underwriting questionnaire to policy issuance. Annual premiums for a mid-size Polish company with PLN 10m in coverage range from PLN 15,000 to PLN 60,000 depending on the company's financial health, sector, and claims history. Distressed companies or those with ongoing regulatory inquiries pay significantly higher premiums – or face exclusions that limit the effective coverage. Budget the legal review of policy wording as a separate cost item; it typically runs PLN 5,000 to PLN 15,000 for a thorough analysis.

Q: Is it true that D&O insurance covers criminal defence costs in Poland?

A: This is a common misconception. Standard Polish D&O policies cover civil liability and regulatory investigation costs. Criminal defence costs – arising from proceedings before the Prokuratura (Public Prosecutor's Office) or criminal courts – are covered only if the policy contains an explicit criminal defence extension. Many Polish policies do not include this extension by default. Directors facing white-collar defence exposure – particularly in insolvency or fraud-adjacent scenarios – must confirm that the policy expressly covers criminal investigation costs, including costs incurred before any formal charge is filed. The extension should cover costs from the moment a director is questioned as a witness, not only after formal suspect status is assigned.

Q: What happens to D&O coverage when a company enters restructuring proceedings under Polish law?

A: Polish restructuring law provides four restructuring procedures, including the postępowanie sanacyjne (remedial proceedings) and the postępowanie o zatwierdzenie układu (arrangement approval proceedings). Opening any formal procedure triggers notification obligations under most D&O policies. Failure to notify within the required period – often 14 to 30 days – can void coverage for claims arising after the notification deadline. More critically, if the policy contains an insolvency or restructuring exclusion without a Side A carve-out, coverage for individual directors may be suspended for the entire duration of the proceedings. Directors entering restructuring should obtain a written coverage confirmation from their insurer before the court order is issued – not after.

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, D&O liability, 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.