A Warsaw-based technology company faces a tax authority audit. The audit escalates into a formal investigation. Board members suddenly discover that personal assets – apartments, savings accounts, investment portfolios – sit squarely in the crosshairs of a personal liability claim. The company's general liability policy covers none of it. That gap is precisely where Directors and Officers (D&O) insurance steps in.

D&O insurance protects individual directors and officers against personal financial loss arising from claims made against them in their managerial capacity. Under Polish corporate legislation, board members face personal liability for company obligations when insolvency filing deadlines are missed, when management decisions cause harm to the company or third parties, and when tax or regulatory duties are breached. A well-structured D&O policy covers defence costs, settlements, and judgments – shifting financial exposure away from personal assets and onto the insurer.

This guide covers the Polish regulatory framework that creates D&O exposure, the key coverage instruments available to Polish directors, the most common policy gaps, and the specific cross-border considerations that multinational boards operating in Poland must address. A self-assessment checklist closes the discussion.

Why does board liability under Polish law make D&O insurance essential?

Polish corporate legislation imposes direct, personal liability on board members in a range of situations. Insolvency law provides a 30-day deadline for filing insolvency proceedings once a company becomes insolvent. Missing that deadline triggers personal liability for the full amount of the company's unsatisfied obligations – a figure that can run to tens of millions of zloty. The Kodeks spółek handlowych (Commercial Companies Code, KSH) separately allows creditors and shareholders to pursue directors for damages caused by negligent or unlawful management decisions.

The National Court Register (KRS) tracks directorial appointments and resignations. A director who resigned but whose resignation was never properly registered remains exposed to liability claims. The Polish Financial Supervision Authority (KNF) can pursue directors of regulated entities for breaches of financial sector rules – with fines reaching PLN 20 million in the most serious cases. The Social Insurance Institution (ZUS) holds directors jointly and severally liable for unpaid employee contributions when the company cannot pay.

Three categories of exposure dominate D&O claims in Poland. First, insolvency-related liability – the 30-day filing rule creates a hard deadline that boards under financial stress frequently miss. Second, tax liability – the Ordynacja podatkowa (Tax Ordinance) allows tax authorities to pursue directors personally for the company's unpaid taxes when enforcement against the company has failed. Third, shareholder derivative claims – minority shareholders in spółka akcyjna (joint-stock company, SA) structures have standing to bring actions against directors for losses caused to the company.

Each of these exposure categories is a direct, personal financial risk. No corporate indemnity protects a director whose company is insolvent. That is the structural reason why D&O coverage is not a discretionary benefit – it is a financial safeguard against irreversible personal loss.

We secured a reversal of a personal liability claim exceeding PLN 3m for a director of a manufacturing client in the Mazowieckie region (autumn 2025). The claim arose from an alleged late insolvency filing. D&O coverage funded the full defence and the eventual settlement.

For a tailored strategy on structuring D&O protection for your board, reach out to info@kordeckipartners.com.

Understanding the liability framework is the foundation. But knowing which coverage instruments address which exposure is the operational question that boards must answer before a claim arises – not after.

What coverage instruments does a Polish D&O policy need to include?

A standard D&O policy sold in Poland typically comprises three insuring agreements. Side A covers individual directors when the company cannot or will not indemnify them – the most important cover in an insolvency scenario. Side B reimburses the company when it has indemnified a director. Side C covers the company itself for securities claims. For Polish directors, Side A is the non-negotiable core.

Coverage scope matters as much as structure. A policy that excludes claims by the company's own insolvency administrator – the syndyk – leaves directors exposed in precisely the scenario where personal liability risk is highest. Polish insolvency practice shows that administrators routinely pursue former directors for decisions made in the 12 to 24 months before insolvency proceedings opened. Policies must be reviewed for this exclusion before signing.

Defence costs coverage deserves separate attention. Polish criminal procedure allows prosecutors to freeze personal assets of suspects at an early stage – sometimes within days of a white-collar defence investigation opening. A policy that advances defence costs without waiting for the final determination of liability provides liquidity when it matters most. The advance should be available within 30 days of a claim notification.

Key coverage elements to verify in any Polish D&O policy:

  • Side A cover with no company-insolvency exclusion
  • Defence cost advancement within 30 days of notification
  • Coverage for insolvency administrator claims against former directors
  • Tax liability cover – specifically, KAS audit-triggered personal assessments
  • Regulatory investigation cover for KNF and other supervisory proceedings

Policy limits also require careful calibration. A PLN 5 million aggregate limit sounds substantial. In a contested insolvency involving a mid-size company with PLN 50 million in liabilities, it covers less than two years of serious litigation. Boards of companies with significant creditor exposure should consider limits of PLN 20 million or above, with separate Side A limits to prevent erosion by Side B and Side C claims.

The pre-pack restructuring instrument – formally, the pre-packaged sale under the Prawo restrukturyzacyjne (Restructuring Law) – creates a specific D&O scenario. Directors who approve a pre-pack sale at a price later challenged by creditors face personal liability claims. Coverage must extend to decisions made in the context of formal restructuring proceedings, not only in ordinary management.

What are the most common D&O policy gaps for Polish directors?

Polish directors consistently encounter four gaps when a claim actually arrives. The first is the claims-made trap. D&O policies operate on a claims-made basis – the claim must be made and reported during the policy period. A director who retires, allows the policy to lapse, and then faces a claim 18 months later for decisions made during the policy period has no cover. Run-off cover – typically purchased for 6 years – is the solution, and it must be negotiated at the time of policy renewal or director departure.

The second gap is the insured-versus-insured exclusion. Many policies exclude claims brought by one insured against another. When a new board sues former directors – a common post-insolvency pattern in Poland – this exclusion can defeat the entire claim. Policies should carve out insolvency administrator claims and derivative shareholder actions from this exclusion.

The third gap involves the conduct exclusions. Fraud and wilful misconduct exclusions are standard. The problem arises when a regulator or prosecutor alleges fraud without a final determination. Many policies suspend coverage on allegation alone. A well-drafted policy maintains defence cost advancement until a court or arbitral tribunal makes a final finding of dishonesty – not before.

The fourth gap is currency and jurisdiction mismatch. A Polish director of a German parent company's Polish subsidiary may face claims in multiple jurisdictions simultaneously. A policy written in EUR with a German insurer may not respond to PLN-denominated Polish court proceedings, or may impose German-law dispute resolution that delays access to funds. Cross-border policies require explicit multi-jurisdiction endorsements.

Our team obtained interim measures protecting personal assets worth over EUR 4m for a director of a foreign investor's subsidiary in Lower Silesia (spring 2026). The D&O policy's advance defence cost provision was activated within 21 days of the claim notification – before the court's interim order could be enforced.

Restructuring Poland scenarios create a specific variant of the gap problem. Directors who initiate formal restructuring proceedings under the Restructuring Law – whether postępowanie sanacyjne (sanation proceedings) or przyspieszone postępowanie układowe (accelerated arrangement proceedings) – remain personally exposed for pre-restructuring decisions. The policy must be in force and must not exclude claims arising from events before the restructuring opening date.

How should foreign investors and cross-border boards address D&O coverage in Poland?

For a German investor entering the Polish market through a wholly-owned spółka z ograniczoną odpowiedzialnością (limited liability company, sp. z o.o.), the parent company's global D&O programme may appear to cover Polish subsidiary directors. It often does not – at least not adequately. Global programmes frequently contain sublimits for non-US, non-EU subsidiaries, or exclude coverage for insolvency-related claims in jurisdictions outside the home country.

Polish insolvency law operates independently of foreign parent company restructuring proceedings. A Polish subsidiary can be placed into insolvency by a Polish court even while the German parent is in protective proceedings under German law. The Polish board members of that subsidiary face personal liability under Polish rules, on Polish timelines, before Polish courts. A global programme that responds to German proceedings may not respond to parallel Polish proceedings at all.

Cross-border insolvency scenarios involving Poland and Luxembourg, or cross-border insolvency involving Poland and the Czech Republic, illustrate the jurisdictional complexity. Each jurisdiction's insolvency regime creates independent liability exposure for local directors. A director who sits on boards in two jurisdictions needs coverage in both – and the policies must be coordinated to avoid gaps where one insurer claims the other's policy responds first.

The practical solution for multinational boards is a controlled master programme with local difference-in-conditions (DIC) policies. The master programme sits at the parent level and provides broad global cover. The local DIC policy fills gaps specific to Polish law – particularly the insolvency filing deadline liability, ZUS director liability, and KNF regulatory exposure. The local policy should be placed with an insurer licensed in Poland, to avoid enforcement delays when a claim is paid.

Technology companies face an additional dimension. IP protection strategy for Polish technology companies intersects with D&O exposure when directors are accused of misappropriating intellectual property or breaching fiduciary duties in licensing decisions. These claims are increasingly common in Poland's growing tech sector. D&O policies should explicitly cover IP-related management liability claims, not treat them as intellectual property insurance matters.

For cross-border boards seeking a coordinated D&O structure across multiple jurisdictions, contact info@kordeckipartners.com for an expert assessment of your specific exposure.

What practical steps should Polish directors take before a claim arises?

Directors who wait until a claim arrives to review their D&O coverage have already lost the most valuable window. Policy gaps cannot be corrected retroactively. The claims-made structure means that changes to coverage terms take effect only for claims made after the new policy inception date. Acting before a claim is the only approach that works.

The decision matrix for Polish directors is straightforward. A director of a single Polish sp. z o.o. with no regulatory exposure and no significant creditor base needs a basic Side A policy with a PLN 5–10 million limit and run-off cover for 6 years post-departure. A director of a regulated entity or a company with material tax disputes needs a higher limit – PLN 20 million minimum – with explicit KNF and KAS coverage. A director of a multinational subsidiary needs the DIC structure described above, coordinated with the parent's global programme.

Timing matters for insolvency scenarios. Cross-border insolvency involving Poland and Luxembourg demonstrates that insolvency proceedings can open faster than boards anticipate. A director who has not reviewed D&O coverage in the 12 months before financial distress becomes visible may find that the insurer decites to renew – or renews with new exclusions that close off precisely the coverage needed.

What to prepare before purchasing or renewing a D&O policy in Poland:

  • A current list of all directorships held, including subsidiary and affiliate boards
  • Copies of existing policies with coverage summaries and exclusion schedules
  • A summary of pending regulatory investigations, tax disputes, and creditor claims
  • The company's most recent financial statements and any restructuring documentation
  • Identification of any cross-border elements – foreign parent, foreign creditors, or foreign proceedings

The review should be conducted with legal counsel who understands both the Polish liability framework and the insurance policy language. An insurance broker can identify market options. A lawyer can identify whether the policy language actually responds to the specific liability scenarios that Polish law creates. Those are different skills, and both are needed.

Personal liability under Polish law is not a theoretical risk. It is a direct, enforceable claim against personal assets – one that D&O insurance is specifically designed to absorb. Directors who treat coverage as a corporate formality rather than a personal financial tool forfeit that protection at the worst possible moment.

To discuss how D&O coverage applies to your specific directorial situation in Poland, email info@kordeckipartners.com.

Frequently asked questions

Q: How long does run-off D&O cover need to last after a director leaves a Polish board?

A: Polish law allows creditors and insolvency administrators to bring claims against former directors for up to 10 years from the date of the relevant management decision, depending on the type of claim. However, the most active claim window is the 3 to 6 years following departure. Standard market practice in Poland is to purchase 6 years of run-off cover. Directors of companies that enter formal insolvency proceedings should extend run-off to the full 10-year period where the premium cost permits.

Q: Does a D&O policy cover personal liability for unpaid taxes under the Tax Ordinance?

A: This is a common misconception. Many standard D&O policies exclude regulatory fines and penalties as a matter of course. However, the personal liability imposed by the Tax Ordinance – where a director is assessed personally for the company's unpaid tax debt – is not a fine or penalty in the insurance law sense. It is a third-party claim for a debt. Well-drafted Polish D&O policies can and should cover this exposure. The policy wording must be reviewed specifically for this exclusion before purchase, as market practice varies significantly between insurers.

Q: How much does a D&O policy for a mid-size Polish company typically cost?

A: Premium levels depend on company size, sector, ownership structure, and claims history. For a mid-size Polish sp. z o.o. with annual revenues between PLN 20 million and PLN 100 million, no regulatory exposure, and no pending disputes, a PLN 10 million limit Side A policy typically costs between PLN 15,000 and PLN 40,000 annually. Companies in regulated sectors, with active tax disputes, or in financial difficulty pay substantially more – sometimes three to five times the standard rate. Run-off cover is priced separately, typically at 150–250% of the final annual premium for a 6-year tail.

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 board liability matters. 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.