A Warsaw-based technology company faces a shareholder derivative claim alleging that its board mismanaged a major acquisition. The directors assumed the company's general liability policy would cover their defence costs. It did not. Within weeks, personal assets were at risk and the board was funding litigation from private accounts.
Directors' and officers' (D&O) insurance is a standalone liability policy that covers personal defence costs and damages awarded against board members acting in their capacity as company officers. Under Polish corporate legislation, directors face personal liability for company obligations when they fail to meet statutory filing deadlines or breach their duty of care. A well-structured D&O policy – with side A, side B, and side C coverage – can be the difference between a manageable claim and personal financial ruin.
This page covers the regulatory basis for board liability in Poland, the structure of D&O coverage that Polish directors actually need, the most common pitfalls that leave gaps in protection, and the cross-border considerations that matter for multinational boards. A self-assessment checklist is included at the end of each section.
Why does board liability arise under Polish law?
Polish corporate liability for directors is grounded in two main bodies of law. The Kodeks spółek handlowych (Commercial Companies Code, KSH) sets out the general duty of care and the consequences of its breach. Insolvency law adds a separate layer: directors who fail to file for insolvency within 30 days of the company becoming insolvent face personal liability for creditor losses. That 30-day deadline is the single most important figure a Polish director should know.
Three institutions play a central role in enforcing these obligations. The National Court Register (KRS) monitors corporate filings and flags delayed submissions. The Polish Financial Supervision Authority (KNF) oversees regulated entities and can initiate proceedings against individual board members. The Office of Competition and Consumer Protection (UOKiK) pursues directors personally in cartel and consumer protection cases. Each creates a separate exposure stream that a D&O policy must address.
The liability picture extends beyond insolvency. Under the Commercial Companies Code, a director who acts against the company's interest – approving a related-party transaction without proper authorisation, for example – can be sued by the company itself, by shareholders, or by creditors. These claims are not hypothetical. We secured reversal of a tax surcharge exceeding PLN 2m for a manufacturing client in the Mazowieckie region (autumn 2025), where the underlying dispute had already triggered a personal liability claim against two board members.
Criminal exposure adds another dimension. White-collar defence matters – including fraud, embezzlement, and acting to the detriment of a company – are prosecuted under the Polish Penal Code. A D&O policy typically covers defence costs even in criminal proceedings, up to the point of a final conviction. That coverage can be worth more than the civil indemnity in practice.
What coverage structure do Polish directors actually need?
A standard D&O policy has three coverage parts. Side A covers individual directors when the company cannot or will not indemnify them – most relevant in insolvency. Side B reimburses the company for amounts it has paid on a director's behalf. Side C covers securities claims against the company itself. For most Polish limited liability companies (spółka z ograniczoną odpowiedzialnością, sp. z o.o.), side A is the most important: it is the last line of defence when the company is insolvent and indemnification is impossible.
Policy limits in Poland typically range from PLN 5m to PLN 50m for mid-sized companies. That range sounds wide. In practice, the limit should be calibrated to the company's revenue, debt exposure, and the cost of running a multi-year commercial litigation before Polish courts. A PLN 5m limit can be exhausted by defence costs alone in a complex restructuring dispute. Side A limits should be set separately – and ideally higher – than the aggregate policy limit.
Several coverage features are non-negotiable for Polish directors:
- Entity investigation coverage – pays defence costs when a director is investigated but not yet charged
- Extradition cost cover – relevant for cross-border boards with directors in multiple jurisdictions
- Spousal and estate protection – extends coverage to a director's assets held jointly
- Pre-pack insolvency cover – ensures the policy does not lapse when the company enters a przygotowana likwidacja (pre-pack sale procedure)
The pre-pack point deserves emphasis. Under Polish restructuring law, a pre-pack sale can transfer the business within days of insolvency proceedings opening. If the D&O policy is tied to the entity and lapses on insolvency, directors lose coverage precisely when they need it most. Side A coverage that is independent of the company's solvency solves this problem directly.
To discuss how a D&O coverage structure applies to your board, email info@kordeckipartners.com.
What are the most common coverage gaps that expose Polish directors?
The most dangerous gap is the insolvency exclusion. Many standard policies exclude claims that arise directly from the company's insolvency – the precise moment when personal liability under Polish law is most acute. Directors should review policy wording carefully: an exclusion for "claims arising from the company's financial condition" can swallow the entire side A benefit in a restructuring context. That gap is irreversible once proceedings open.
A second common gap involves the conduct exclusion. Policies typically exclude dishonest, fraudulent, or deliberately wrongful acts. The problem arises when a claim alleges fraud but has not yet been proven. If the insurer withdraws defence funding at the allegation stage – rather than after a final court finding – the director is left unprotected during the most expensive phase of litigation. Polish law allows insurers to reserve their position, but the policy should require them to fund defence until a final judgment.
Our team obtained interim measures protecting assets worth over EUR 5m for a German investor's subsidiary in Lower Silesia (spring 2026), where the underlying D&O policy had a conduct exclusion that the insurer sought to invoke at the investigation stage. Negotiating that exclusion's trigger point – allegation versus final finding – was the critical issue.
Other gaps to check:
- Prior acts exclusions that cut off coverage for decisions made before the policy inception date
- Pollution exclusions that can be read broadly in environmental liability cases
- Professional services exclusions that strip coverage from directors who also serve as advisers
- Group entity definitions that leave subsidiaries or foreign branches unprotected
The trigger type matters too. Claims-made policies – the standard in Poland – cover claims first made during the policy period. If a director resigns and the claim arrives after policy renewal, coverage depends on whether the new policy includes a run-off period. Run-off cover of at least six years is standard practice. Failure to arrange it forfeits protection for the entire prior period of service.
How do cross-border boards and foreign investors affect D&O coverage in Poland?
For a German or Dutch investor whose Polish subsidiary has a mixed board – local directors alongside foreign nationals – the D&O question becomes a coordination problem. The parent company's global D&O policy may cover the Polish subsidiary in theory. In practice, Polish law governs the liability of directors of a Polish-registered entity. A global policy written under English or New York law may not respond correctly to a KSH-based claim or a Polish insolvency filing deadline.
Polish restructuring law – including the Prawo restrukturyzacyjne (Restructuring Law) and the insolvency provisions of the Prawo upadłościowe (Insolvency Law) – creates obligations that are specific to the Polish jurisdiction. A director of a Polish sp. z o.o. cannot rely on a global policy that has not been endorsed to cover Polish statutory liability. The 30-day insolvency filing obligation and the personal surcharge liability under tax law are two examples of Polish-specific exposures that require explicit coverage language.
Cross-border insolvency adds further complexity. When a Polish entity has assets or creditors in Lithuania or Ukraine, the proceedings may involve parallel restructuring tracks. Our analysis of cross-border insolvency involving Poland and Lithuania and cross-border insolvency involving Poland and Ukraine sets out how these dual-track proceedings affect board obligations in each jurisdiction. A D&O policy must be structured to respond to claims in both forums simultaneously.
Technology companies face an additional layer. Directors of Polish tech companies may face IP-related claims alongside corporate liability. Our guidance on IP protection strategy for Polish tech companies addresses the overlap between corporate governance and intellectual property risk – relevant when a board decision about IP licensing triggers both a shareholder claim and a D&O notification obligation.
For a tailored strategy on cross-border D&O coverage for your Polish operations, reach out to info@kordeckipartners.com.
What should Polish directors check before renewing their D&O policy?
Policy renewal is the moment when coverage gaps can be fixed – or locked in for another year. Most directors treat renewal as an administrative task. It is not. The company's risk profile changes year on year: new contracts, new regulatory obligations, new jurisdictions. A policy that was adequate 12 months ago may be materially inadequate today.
The renewal review should address three threshold questions. First, has the company's revenue or debt exposure grown beyond the existing policy limit? Second, has the board added members with cross-border exposure – directors who sit on boards in other EU jurisdictions or in Ukraine? Third, has the company entered any regulated sector – financial services, healthcare, energy – that creates KNF or sector-specific regulatory exposure?
What to prepare for a D&O renewal review:
- Current policy wording, including all endorsements and exclusions
- A list of all entities covered – including subsidiaries and foreign branches
- Details of any pending claims, investigations, or regulatory inquiries
- The company's latest financial statements and debt schedule
- A summary of any board composition changes in the prior 12 months
The decision matrix is straightforward. A company with revenue above PLN 100m, cross-border operations, or directors in regulated roles needs a bespoke policy with explicit Polish statutory liability endorsements and a minimum six-year run-off provision. A smaller, domestically focused company may manage with a standard market policy – provided the insolvency exclusion has been removed and side A coverage is ring-fenced from the aggregate limit. The cost difference between these two structures is often less than the cost of one day of commercial litigation.
Frequently asked questions
Q: Does a D&O policy cover the cost of a KRS or KNF investigation before any formal charges are brought?
A: Most modern D&O policies include entity investigation coverage, which pays defence costs when a director is the subject of a formal investigation by a Polish authority – including the National Court Register or the Polish Financial Supervision Authority – even before charges are filed. The key is to check whether the policy defines "investigation" broadly enough to capture informal inquiries and document requests, not only formal proceedings. Directors should confirm this with their broker before inception, not at the point of notification.
Q: How long does run-off cover need to last for a Polish director who has resigned?
A: Under Polish civil law, the general limitation period for claims against directors is three years from the date the claimant discovers the damage, subject to an absolute maximum of ten years from the event causing the loss. Six years of run-off cover is the market standard and protects against most claims. Directors who served during a period of significant financial difficulty – or who oversaw a major acquisition or restructuring – should consider extending run-off to ten years. The premium for the additional four years is typically modest relative to the exposure.
Q: Is a global D&O policy taken out by a foreign parent company sufficient to protect directors of a Polish subsidiary?
A: Not automatically. A global policy must be specifically endorsed to cover Polish statutory liability under the Commercial Companies Code and Polish insolvency law. Without that endorsement, a claim based on the 30-day insolvency filing obligation or a KSH-based duty of care breach may fall outside the policy's scope. Polish directors should obtain written confirmation from the insurer that the policy responds to Polish-law claims and that the claims-made trigger operates correctly under Polish procedural rules. Relying on a global policy without that confirmation is a common and costly mistake.
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 advise Polish entrepreneurs, foreign investors, and in-house legal teams on D&O coverage structures, board liability, and pre-pack insolvency procedures. 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.