Three D&O liability insurance trends to watch for mining and metals executives

The clean energy transition is accelerating demand for the mining sector

Despite a recent uptick in fossil fuel investment, the need to participate in the clean energy transition is unavoidable for the natural resources sector, and metals and mining companies have a major role to play.

The need for lithium, copper, cobalt and rare earth elements is growing at an unprecedented pace. To meet demand while decarbonizing their own operations, mining and metals companies are planning to increase their spend on clean energy by 51% from the last financial year (2024-25), to the next (2025-26)^[2]. Even major fossil-fuel-focused economies such as the Middle East are shifting their focus toward metals mining, recognizing the longer-term demand for these resources in electric vehicle production, battery technology and renewable energy.

There’s an abundance of opportunity for the mining and metals sector. But with change, comes risk. The uptick in demand and consequent increase in mining activity for critical minerals can open up more opportunities for mining executives to be exposed to legal, regulatory and operational risks. As scrutiny from governments, investors and activist groups grow, so too does the potential for directors and officers to face lawsuits, regulatory actions and reputational damage.

Executives across the mining and minerals sector may be subject to allegations of greenwashing, misrepresentation of ESG commitments, failing to meet stated sustainability goals, or even risks of corporate manslaughter-related charges in the event of a disaster such as a tailings dam collapse. The triggers for a D&O can vary, but can all lead to:

Tailings dams and storage facilities are a major D&O risk

Tailings storage facilities (TSFs) are becoming one of the most severe risks for mining companies and their executives. In the aftermath of a major tailings dam failure in 2015, executives faced criminal charges for environmental crimes and homicide, and financial penalties and compensation claims amounting to billions of dollars.

The top three D&O trends to watch in the mining and metals sector

Regulators are imposing stricter standards and penalties for executives in the mining and metals sector and against this backdrop, evolving D&O risks are escalating in complexity and severity.

The Trump administration’s stance has precipitated softening positions among major capital markets, at least in the U.S. “Environmental, social and governance (ESG) standards add additional layers of complexity, with standards being imposed by governments and global regulators. But the picture isn’t as clear as all-in or all-out when it comes to ESG. In the EU, the Omnibus Directive ^[3] will limit the reporting obligations brought in under the various recent directives to larger companies, significantly limiting their scope from the legislation originally passed.” Nicholas Hurst, Account Director – D&O.

Directors and officers are responsible for overseeing and implementing policies that align with evolving regulations, but different jurisdictions impose inconsistent environmental and safety regulations. But executives who fail to meet the regulatory standards can face penalties, even if they are based in another country. In moving through complex, overlapping and sometimes contradictory legal requirements, stakeholders will continue to seek conformance with rigorous standards.

Take action: Ensure that local D&O policies are set up to ensure that claim settlements can be made directly into different countries.

Tailings dams are getting bigger and bigger. On the launch of the world’s first public database of mine tailings dams in January 2020, the public can now access detailed information on the location and quantity of liquid and solid waste from more than 1,700 tailings dams.^[4] Professor Elaine Baker from the School of Geosciences is director of the GRID-Arendal office at the University of Sydney and has been a driving force in the foundation of the Global Tailings Portal, explaining that “mining companies have found most of the highest-grade ores and are now mining lower-grade ones, which create more waste” ^[5] and the increasing volumes directly increase the severity of a failure. The database is a call to arms for mining companies to work toward reducing dam failures in the future.

Meanwhile, the Global Industry Standard on Tailings Management (GISTM) – published by the International Council on Mining and Metals (ICMM) in August 2020^[6] – has advocated for more rigorous standards on zero harm to people and the environment. Across 15 principles and 77 auditable requirements, the GISTM requires mining operators to implement best practices in planning, design, construction, operation, maintenance, monitoring, closure and post-closure activities. Both ICMM members and non-members are feeling the heat from insurers about compliance and closing the gap with GISTM. Regulators are now holding company executives personally accountable for non-compliance.

Take action: Conduct a thorough assessment of business operations and protocols to identify misalignment with regulatory standards. Engaging with external risk engineers to provide an objective assessment of risk to highlight where risk controls can be implemented and build risk resilience against potential exposures — reinforcing the business’ safety standards, reducing the risk of a regulatory breach and avoiding a D&O exposure.

With rising operational costs, supply chain disruptions and volatile commodity prices, some mining companies may face financial distress or insolvency. Challenged by these global pressures, executives are exposed to claims from creditors for alleged mismanagement leading to financial collapse; regulatory investigations into whether executives breached fiduciary duties, and shareholder lawsuits alleging misrepresentation of financial reporting and financial health before insolvency.

Take action: It is crucial that adequate Side A cover is in place as part of the D&O policy, ensuring that cover is provided for individual directors if the company becomes insolvent and cannot indemnify them.

Using D&O insurance to protect individuals and businesses: a two-pronged approach

Mining and metals companies need to consider how to dovetail D&O coverage with traditional property, casualty and business interruption coverage: protecting people and the business.

It doesn’t end with executives. Major incidents, such as a tailings storage facility (TSF) failure, have direct property and liability impacts on mining and metals companies alongside the individual executives themselves. In the event of legal action against an executive, the company-wide exposures could include:

• Costs and revenue disruption: Many institutional investors and banks are tying their financing to ESG or sustainability performance, meaning that poor compliance could lead to funding withdrawals or shareholder lawsuits. Alongside cleanup costs, legal liabilities, fines and compensation claims, the risk to revenue and profitability can be substantial.
• Eroded reputation: Significant reputational damage can lead to loss of investor confidence, customer trust and market value.
• Regulatory scrutiny: Increased regulatory scrutiny and potential for stricter regulations can arise from TSF failures, adding to the operational and compliance burdens on the company, thereby eroding margin and shareholder value.
• Environmental damage: Failures can lead to catastrophic environmental damage, including contamination of water sources, destruction of ecosystems and long-term soil degradation.
• Human safety: Historical data shows that TSF failures have caused numerous fatalities and displaced communities.

Engaging with D&O insurance markets is a critical component of a robust and comprehensive risk management strategy. With the support of sector-focused risk advisors and brokers, executives can conduct a thorough assessment of their risk resilience across different scenarios, identify where best to implement risk controls and build a sophisticated risk financing strategy that delivers the optimal balance of cost and coverage.

“D&O insurance can protect executives – and by extension – the company itself – from liability in a disaster or failure event, and from community backlash, which can run into the billions of dollars. The increased premium cost should be considered against the benefits, and the solution will be unique to each company.” William Fremlin-Key, Global Head of Mining and Metals, Willis Natural Resources.

When considering D&O policy renewal terms, executives in the mining and metals sector should work with their brokers to:

• Remove TSF exclusions where possible.
• Ensure that full limits regulatory investigation coverage (covering directors and officers’ legal costs) is included where achievable.
• Consider if additional Side A cover should be in place to protect individual executives for situations where indemnification from the company is unavailable.

“For TSF risks in particular, insurers introduced exclusions for TSF-related claims in previous years, which could leave executives dangerously exposed. Market forces are driving competition in the D&O insurance market, and many mining companies have scope to secure full TSF coverage on their policies.” William Fremlin-Key, Global Head of Mining and Metals, Willis Natural Resources.

Contact our team to find out how you can protect your executives and your business from evolving D&O risks.

Footnotes

1. Tailings dam failures: A critical evaluation of current policies and practices, March 2025. Return to article
2. Global Clean Energy Survey 2025 Report, shows 51% of 90 mining and metals respondents. Return to article
3. An official website of the European Union Return to article
4. Press release: World’s first public database of mine tailings dams aims to prevent deadly disasters Return to article
5. World-first database aims to prevent deadly mine dam disasters Return to article
6. Global Industry Standard on Tailings Management Return to article