You've just been appointed to a board. Alongside the constitution, the company secretary slides across a deed of access and indemnity for your signature. Or maybe you're already on the board and realised you never received one. Either way, this document matters more than most directors appreciate — and the default version the company offers is rarely the version you should sign.
A deed of access and indemnity is a contract between you as a director and the company. It operates separately from the constitution and from any rights you have under the Corporations Act 2001 (Cth). Its job is to supplement those statutory rights by giving you practical access to the company's records, committing the company to fund your legal costs before you're out of pocket, and requiring the company to maintain directors and officers (D&O) insurance. A well-drafted deed doesn't eliminate your exposure — it makes sure you can actually defend yourself if something goes wrong.
The essential clauses
Access to company books and records
This clause grants you the right to inspect and copy the company's books and records during and after your tenure. It sounds administrative, but it's the clause you'll need most urgently if a regulator comes knocking or litigation commences — often years after you've left.
The deed should define "books and records" broadly and specifically. Useful inclusions:
- Board papers, meeting agendas and attachments from your period as director
- Minutes of board and committee meetings
- Financial statements, management accounts and tax returns
- Legal opinions provided to the board while you held office
- Any written correspondence or reports that informed board decisions you participated in
The access right also needs to reach the company's record-keeping obligations under s 286 of the Corporations Act 2001 (Cth), which requires financial records to be retained for seven years after the transactions they cover. A deed that merely grants access without requiring the company to actually keep those records is only half a solution.
The trap: Access clauses that expire when you resign, or that require the company's prior consent before you can make copies, give away most of the practical value. The right needs to survive the end of your appointment and operate without ongoing board approval.
Indemnity against legal costs and liabilities
This is the commercial heart of the deed. An indemnity means the company commits to pay your legal costs and any liabilities that arise from your role as a director — not merely reimburse you after the event, but fund your defence as it unfolds.
The scope of the indemnity matters enormously. You want coverage for:
- Legal costs incurred in responding to a regulatory investigation, even if no proceedings follow
- Costs of defending civil proceedings brought against you as a director
- Costs of defending criminal proceedings, subject to the statutory limits discussed below
The indemnity should be framed as broadly as the law allows. A formula like "indemnify against all claims, actions, and liabilities arising from any act or omission in the performance of duties as a director, to the maximum extent permitted by law" is a reasonable starting point. The phrase "to the maximum extent permitted by law" does real work here — it builds the statutory limits in without requiring the parties to enumerate every carve-out.
What the other side will push for: Companies often include a requirement that you cooperate with any defence they run, give them sole conduct of proceedings, and accept their choice of counsel. These are legitimate interests, but they need to be balanced.
What you should push back on:
- Insist on the right to approve any settlement — a deed that lets the company settle on your behalf without your consent can result in an outcome that damages your reputation or implies wrongdoing you dispute
- Negotiate in a right to retain your own lawyer if there's a conflict of interest between your position and the company's (for example, if the company and you are co-defendants with different defences)
- Make the indemnity respond to costs as they are incurred, not after the proceedings conclude — directors who have to fund their own defence pending reimbursement face genuine financial hardship
Duration of the deed
The deed needs to outlast your appointment. State limitation legislation — for example, s 14 of the Limitation Act 1969 (NSW) — generally allows six years from the date a cause of action accrues for civil claims. That means you can be sued for conduct during your directorship for up to six years after you resign.
A deed that terminates when you leave office leaves you exposed precisely when you're most likely to need it. The deed should expressly provide that all protections — access rights, indemnity, insurance obligation — continue for at least seven years after you cease to be a director.
The trap: Evergreen clauses that renew automatically are fine; clauses that expire on a fixed date tied to when the deed was signed (rather than when you resign) are not. Read the termination provision carefully.
Directors and officers insurance
The indemnity clause and D&O insurance work differently but are complementary. The deed should require the company to maintain D&O insurance from a reputable insurer for the duration of your appointment and for a run-off period after you leave.
The insurance obligation in the deed serves two functions. First, it fills gaps in the indemnity — the deed cannot indemnify you against every liability (the statutory limits described below exclude some), and insurance can pick up liabilities the deed cannot cover. Second, it protects you if the company becomes insolvent: an insolvent company cannot honour an indemnity, but an insurance policy paid for before insolvency can still respond.
What you should require in this clause:
- Confirmation that the policy is maintained with a reputable insurer — the deed should not simply say "the company will use reasonable endeavours to obtain insurance"
- Access to the policy itself, not just a summary — you cannot assess coverage from a marketing brochure
- A certificate of currency issued annually, confirming the policy is in force
- A minimum period of run-off cover after your resignation — at least seven years, matching the indemnity term
The variant the other side usually resists: Specific insurer standards and minimum sum-insured requirements. Push for them anyway — a policy with a low limit or written through a marginal insurer provides false comfort.
Control of proceedings
This clause governs who runs the legal proceedings if you are sued in your capacity as a director. Companies commonly claim the right to take over conduct of any claim against you — instructing lawyers, making tactical decisions, agreeing to settlement.
That right is not unreasonable; the company has a financial stake in the outcome. But the clause should be conditional:
- The company's conduct rights should not extend to accepting a settlement that admits wrongdoing on your part without your written consent
- If the company's legal interests conflict with yours — different defences, claims against each other, or disputes about whether you acted within the scope of your authority — you should be entitled to instruct independent counsel at the company's cost
- You should receive regular updates on proceedings even when the company has conduct
Payment obligations and timing
Even a well-drafted indemnity can become useless if payment is delayed. The deed should require the company to:
- Advance legal costs as invoices fall due during the proceedings
- Provide funds within a defined period (five or ten business days is reasonable)
- Not require you to demonstrate a likelihood of success before advancing funds
If the deed only entitles you to reimbursement after a final outcome, you may need to fund years of litigation personally before the indemnity responds.
Optional and situational clauses
These provisions are not essential in every deed but arise frequently enough to be worth flagging:
- Indemnity cap: Some companies try to limit the maximum aggregate indemnity to a fixed amount. If this appears, it needs to be high enough to cover plausible litigation costs and any damages — and should not apply to the access or insurance obligations.
- D&O tail period: A specific obligation on the company (or successor entity) to maintain run-off D&O cover for a defined period after a merger, acquisition, or winding up — the moment coverage is most likely to lapse.
- Subrogation limitation: Prevents the company's insurer from stepping into the company's shoes and pursuing you personally after paying out a claim. Standard in well-drafted deeds; easy to miss in template versions.
- Change of control clause: If the company is sold or restructured, the deed should bind the acquiring entity — without this, a new owner can simply decline to honour the original indemnity.
- Pre-approval for settlements: Where the company has conduct of proceedings, a right requiring your pre-approval for any settlement that expressly or implicitly admits fault on your part.
How Artificer Legal approaches these deeds
A deed of access and indemnity looks short but its drafting choices have long tails. The clauses we examine most carefully when reviewing or negotiating on a director's behalf are:
The scope of the indemnity. The Corporations Act 2001 (Cth) places firm statutory limits on what a company can indemnify. Under s 199A, a company cannot indemnify a director against a liability owed to the company itself, against a pecuniary penalty order under the Act, against a liability that did not arise from conduct in good faith, or against the legal costs of criminal or civil penalty proceedings where the director is ultimately found liable. Any provision that purports to go further is void under s 199C. That means the indemnity clause needs to be carefully drafted to maximise the permissible coverage without including void provisions that could undermine the enforceability of the whole clause.
The interplay between the indemnity and D&O insurance. We push for coordinated coverage — the indemnity responds first; D&O insurance fills gaps. If the deed is silent on coordination, you risk a dispute between the company and its insurer about which responds first, during which neither pays.
The duration and survival clause. We routinely insist on a survival term of at least seven years post-resignation, and we check that the survival clause extends to the access right and the insurance obligation — not just the indemnity covenant.
The conduct-of-proceedings clause. We negotiate the company's right to control proceedings as a limited right with express carve-outs — particularly for conflict of interest situations. We also push for independent counsel rights at the company's cost, which most template deeds omit.
The record-keeping covenant. We add an express covenant requiring the company to comply with its obligations under s 286 of the Corporations Act 2001 (Cth) and to notify the director if records are at risk of destruction (for example, on a winding up).
If you have received a deed to sign — or are putting one in place before accepting a directorship — Artificer Legal can review the terms, identify the gaps, and negotiate on your behalf before you commit.
Whether the indemnity advances or reimburses
The timing of payment under the indemnity is the provision most likely to determine whether the deed works in practice. An indemnity that reimburses rather than advances means you fund your own defence — potentially for years and potentially at significant personal cost — before the company's obligation crystallises. In that scenario, the indemnity exists on paper but provides no practical protection during the period you most need it.
That said, a deed of access and indemnity is most valuable when it is read as a system of interlocking obligations: access rights that survive your resignation so you can reconstruct events; an indemnity scoped as broadly as the Corporations Act 2001 (Cth) allows; D&O insurance that picks up what the indemnity cannot cover; and a duration that accounts for the limitation period on claims against former directors. Each element reinforces the others, and a weakness in any one of them — a narrow access clause, an absent insurance covenant, an indemnity that only reimburses — can undermine the whole arrangement.