Directors & Officers Liability
What is it & why should I have it?
Directors & Officers of companies of all sizes have certain personal liabilities, which come with the duties of their position.
If a Director breaches or neglects these duties, then actions may be brought against them, for which they are personably liable.
A common misconception is that being a director of a limited company in some way limits the director’s personal liability – This is not the case – a director’s personal liabilities are unlimited!
Directors and Officers insurance provides cover for the cost of defending claims, allegations, damages and settlements for “wrongful acts” (things that directors might get sued for because they are the directors of a company) eg: Health & Safety, Corporate Manslaughter, wrongful trading, data protection just to name a few!
A Directors and Officers policy ensures that funds are available for directors to get the benefit of an expert defence when they need it the most. Quite often a director may not have breached their duties, however the legal costs of defending an alleged wrong doing can be so expensive that a director simply cannot afford to defend themselves!
Why should I have it?
- In the course of carrying out everyday duties for a company, directors or officers are exposing themselves personally to lawsuits, investigation and criminal prosecutions. Without adequate insurance cover a director will have to meet any costs personally.
- Director Disqualification - Having Directors and Officers insurance in place will enable a director to fund hiring some of the best law firms in the country to help achieve the best outcome possible.
- Investigation - Government bodies such as the Health & Safety Executive (HSE), DTI, Serious Fraud Office, the Disability Rights Commission to name a few, can investigate companies and are increasing their focus on smaller businesses. So to have the backing and funding of an insurance policy to obtain legal representation enables a director to gain the best possible outcome.
- Personal Liability - Director’s personal assets, their home, savings etc are at risk. Mistakes, whether deliberate or accidental can be very costly. Directors and Officers insurance is not designed to cover fraudulent acts, however there are many instances of directors being held personally liable when they haven’t been dishonest, but rather just failing to take sufficient care.
- Family Companies – often the hotbed of disputes both internally and externally.
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| Reg. No. | 4842771 |
Tel: 01204 388644 Fax: 01204 521319