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Directors & Officers

Directors & Officers

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The directors and officers in your company are in a position of responsibility. Managers, directors and supervisors can face allegations and claims for which they may be personally liable.  Even in a company with limited status, personal liability is unlimited.

Directors and officers are under increasing scrutiny, and it is common place for allegations of wrongful acts to be made.  Any allegations of wrong doing need to be investigated and defended, and this can cost a significant amount even if the case doesn’t reach court.

This means directors and officers personal finances are at risk. So it’s essential that companies provide protection with Directors and Officers Liability Insurance (D&O).

Directors and officers insurance covers costs associated with the defence of an allegation of a wrongful act.  This means it takes away the financial risks faced by directors and officers, giving them protection should an allegation or claim be made against them.  Considering that even simple investigations can cost thousands of pounds, purchasing directors and officers insurance makes sense.

Whichever sector your company operates in, your directors and officers face the same types of liability.

Why are individuals so venerable?

 

  • Employees know their employment rights and are increasingly likely to sue.
  • Legal liability is shifting away from companies and towards personal liability.
  • Regulators and now more proactive in investigating companies.

 

What is a wrongful act?

  • This could be a breach of trust, breach of duty, neglect, error, misleading statement, or wrongful trading, committed or attempted by a director or officer whilst acting in this capacity on behalf of the company.

Where can claims come from?

  • Employee Claims – Unfair dismissal, failure to promote, negligent evaluation, harassment or discrimination – there are thousands of claims brought against directors and officers every year.
  • Regulators – Companies face investigation from legal bodies such as the Health & Safety Executive and Department of Trade & Industry and other industry-specific regulators, and the associated costs can be significant, even if no wrongdoing is proved.
  • Shareholders – Following some high profile claims, shareholders now scrutinise the activities of directors even more closely, and there are more requirements for transparency of directors’ decisions.
  • European Legislation – Directors and Officers must ensure their company does not breach any European legislation, but with such diverse responsibilities it can be difficult to stay up to date on the latest directives.
  • Creditors / insolvency claims – These types of claims are being brought more frequently, and directors and officers can be singles out for such claims.
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Directors & Officers

Even if your company has a limited status, its senior staff can face personal liability. If you’re a director or officer, Directors & Officers insurance can protect you and help keep you out of the firing line.

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