Does a Nominee Director Needs D&O Liability Insurance? Most Don’t Know This

If you think a nominee director is just a name on paper, think again.

In Singapore, a nominee director is legally responsible for a company’s actions, even if they don’t run the day-to-day. That means the nominee director can still be held personally liable if the company breaks the law or faces a lawsuit. And yet, many business owners and nominee directors don’t know this risk exists. Understanding the risks of being a nominee director in Singapore is critical for any business owner.

So here’s the burning question: Does a nominee director needs D&O liability insurance?



Yes, if they want to sleep well at night.

Why a Nominee Director Should Strongly Consider D&O Coverage

Many assume that a nominee director is “just there for compliance.” However, under the Companies Act in Singapore, a nominee director is a legal company director with the same fiduciary duties, responsibilities, and risks of being a nominee. Being a nominee director is not just about fulfilling a requirement; it comes with legal duties and potential liabilities.

That means a nominee director in Singapore can be sued personally for breach of duty, regulatory non-compliance, or negligence, even if they weren’t involved in daily operations. These directors and officers are expected to act in the best interests of the company. A nominee director is treated no differently from non-executive directors in the eyes of the law.

For a business owner appointing a nominee to meet the requirement of having at least one director who is locally resident, this legal exposure is real. The nominee director can be personally liable if the company faces a lawsuit, shareholder dispute, or government investigation. The Singapore Companies Act does not exempt nominee directors from imprisonment term or financial penalties.

That’s why D&O liability insurance isn’t just optional — it’s a strategic necessity. A nominee director in Singapore who fails to carry out due diligence may endanger not just the company information but also their own personal finances.

A nominee director should consider D&O insurance to protect against:

• Legal costs arising from claims or investigations
• Damages and settlements ordered by courts
• Regulatory claims from bodies like ACRA or IRAS
• Personal asset loss due to director liability
• Risks associated with bank accounts and business decisions

Whether dealing with officers' D&O liability or managing conflict of interest, a D&O policy helps cover unexpected liabilities of a nominee director in Singapore.

D&O coverage is not just peace of mind — it's smart risk management for both the nominee and the foreign company owner.

Pros of Getting D&O Insurance for a Nominee Director

• Protects Personal Assets – Legal actions can target the nominee’s personal finances and information.
• Covers Legal Costs – D&O policies include coverage for defense costs, settlements, and investigations.
• Boosts Credibility and Trust – Founders feel more secure working with directors protected by D&O insurance.
• Adds a Safety Net – Especially important in a highly regulated country like Singapore.
• Professional Confidence – This allows the nominee to perform their role without fear of personal consequences, which can be a game-changer for the business's overall health.

The Risk of Going Without It? Here’s What Can Go Wrong

• ACRA Investigations – If the company is under scrutiny, the nominee director in Singapore may be called in for questioning.
• No Legal Exemptions – Even if they’re “just a nominee,” they can still be held liable under the Singapore Companies Act.
• Personal Liability Exposure – Directors can be personally responsible for compliance failures, tax issues, or financial misstatements.
• Reputational Damage – Being named in legal claims can affect the director’s standing, even if fault isn’t proven. This can lead to loss of business opportunities and access to professional resources.

Is D&O Insurance Mandatory for Nominee Directors?

D&O liability insurance isn’t legally mandatory, but it’s highly recommended. In Singapore’s compliance-heavy business environment, protecting the nominee director is good risk management. The absence of liability insurance could increase exposure to claims, especially for companies expanding across multiple countries.

A nominee director is a director under the law. Without D&O insurance, they face risks related to the company’s actions. Refusal to serve or delays in appointment often occur when liability protection isn’t offered. Every company should evaluate its responsibilities and obligations of being a nominee to avoid legal trouble.

Let CFO Group Help You Appoint a Nominee Director—With Real Protection That Matters

When you appoint a nominee director through CFO Group, you don’t just tick a legal box—you protect your business and your director.



We are your trusted compliance and liability shield, offering:

• Vetted and experienced nominee director in Singapore
• Comprehensive D&O liability risk review and insurance setup
• Legally binding Nominee Director Agreement for your protection
• Full compliance with ACRA, MOM, and the Companies Act

Talk to us today — and gain the confidence that your nominee director is safe, your setup is legal, and your business is protected.