BERLIN—A law that requires publicly traded companies in Germany to impose personal deductibles on directors and officers covered by liability insurance went into effect Wednesday.

The Act on the Adequacy of Managerial Salaries was published Tuesday in Germany’s Federal Law Gazette with an effective date of Aug. 5.

The law requires companies that buy D&O liability insurance to impose a per-loss deductible of 10% on covered directors or officers. The amount is capped at 1.5 times the individual’s annual fixed compensation.

All new D&O coverage is required to include the deductible; policies already in force must be amended by July 2010 to include it.

Insurers have indicated they will develop new coverage to insure the deductible separately at the director’s or officer’s expense, a step that is not precluded by the law.