Directors and Officers Liability Insurance
Overview
Many years ago it was both an honour and privilege to be asked to become a director. Unfortunately in the litigious world we now live in being a director exposes you to personal bankruptcy, disqualification as a director and eve a custodial sentence.
Many directors do not realise that whilst the Company and its Shareholders have limited liability, Directors and Officers face UNLIMITED Liability.
Directors, Officers and Senior Managers of a company face unlimited liability for claims arising from their actions and the decisions they make whilst managing the business. These so called wrongful acts can arise from breach of trust, breach of duty, neglect, error, misstatement, libel, slander and breach of wrongful trading to name but some of the many areas of law.
Regrettably directors are being increasing implicated in legal proceedings because it is generally accepted that the only difference between a well run and a badly run company are the people running it, which are the directors and therefore they should be held to account for their actions.
How a Claim could arise?
Potential litigants bringing an action against a Director could include:-
Employees
Creditors
Customers
Competitors
Regulators
Shareholders
Liquidators
Health and Safety at Work
In addition there are hundreds of potential areas for non compliance under the Companies Act 2006.
Claim Scenarios
1. Insolvency
Following a company going into liquidation creditors pursue a claim against the directors for continue to trade whilst insolvent.
2. Health and Safety
Following an accident at work the Health and Safety Executive pursue a claim against a director for breach of health and safety legislation.
3. Environment
The Environment Agency commence proceedings against a director following a pollution incident.
4. Employment
Following a dismissal of an employee the director is implicated in proceedings for unfair dismissal.
The Company
A standard Directors and Officers policy will not protect the Company but cover for the Company, often referred to as “the Entity” can now be included for an additional premium.
Some policies allow add on covers for Employment Practice Liability (EPL) for the Company and Crime including theft by employees etc.
Next Step
Remember cover is arranged on a Blanket Basis to cover all Directors and Officers.
Premiums start from as little as £193.75 per annum for all directors and officers and don’t worry there is normally no need to complete a proposal form.
To obtain a quotation please CLICK HERE.