Directors and Officers Insurance
Why you need Directors and Officers Insurance
Are you a Company Director or Officer?
If you are, then you could be held liable personally for a range of issues that could cost tens of thousands - and your current Insurance arrangements may not cover this because....
When faced with certain legal actions against themselves as individuals, Directors and Officers of a company are not protected by Professional Indemnity, Public or Employers Liability Insurance.
What is Directors and Officers Insurance?
Protect your personal assets
Directors and Officers Insurance is a vital part of a company's Insurance programme, usually arranged under a separate specialist policy.
First and foremost, it will cover your personal wealth for defence costs incurred during a claim and awards made against you. This could be following a civil or criminal offence.
Mismanagement - a director of a sporting goods group faced a claim from his former employer after allegations that he had acted in breach of his duties as a director in running the business.
Costs in successfully defending the director were more than £30,000.
What else does Directors and Officers Insurance cover?
There are several key Insurers in the Directors and Officers Insurance market, and each policy has a slightly different wording.
Typically, Directors and Officers Insurance can be broken down into the following three areas:
Directors’ And Officers’ Liability
This covers your personal wealth for defence costs incurred during a claim and awards made against you. For example:
- claims by investors or other shareholders (including other directors)
- defence costs and awards of claims arising from your personal involvement with the administration of any company pension
Tax - the directors of a property investment company were prosecuted by HM Revenue & Customs for allegedly making false statements in an earlier tax investigation.
Legal fees in the case came to more than £50,000.
Employment Practice Liability
This cover is essential for any employer but is not always provided as standard. It covers your company and your employees against defence costs and awards of employment claims arising, for example:
- from allegations of sexual harassment or wrongful dismissal by employees
- from allegations of incorrect selection for redundancy
Unfair Dismissal - An IT consultancy faced a claim from a former employee who had been made redundant. The employee claimed he should not have been selected for redundancy as he had taken a salary sacrifice in the last year.
The legal fees in successfully defending the case were more than £8,500.
Corporate Legal Liability
This covers your company against defence costs and awards associated with events such as:
- allegations you have breached regulations, for example Tax, Health & Safety or Trading Standards
- claims by investors or shareholders
- direct financial loss from employee dishonesty
Pensions Error - an employee of a management consultancy group made a claim alleging that the company had not added her to the group’s pension scheme as instructed a number of years earlier.
The company were held liable and were required to pay £20,000 to compensate for her loss.
Protect yourself with Directors and Officers Insurance today
As specialists in Business Insurance, we have a wealth of experience in Directors and Officers Liability Insurance.
In most cases you can get your quote and be on cover the same day of you contacting us.
We can also help you spread the cost of your cover over by Direct Debit, and in most cases, this can be over 12 months interest-free.
So contact us today to discuss your Insurance requirements!
Give us a call on 01708 289 525
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Fill in our 'Get a Quote' form
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We look forward to being of assistance!