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Sometimes the decisions that you make on behalf of the company can leave you personally exposed to compensation claims, investigations and prosecutions. The costs of defending such actions can be life-ruining and with litigation on the rise, there has never been a more important time to put effective cover in place to protect yourself.
Civil and criminal actions can be brought against company directors, officers and senior managers alike, so if you're in a position of vulnerability and would like to find out more about protecting yourself give one of our experienced advisors a call.
We are on hand to explain the covers available and to source you a policy that is right for you. So why not call us now for a no-obligation quote?
Directors & Officers insurance is designed to support the individuals that work in the company if they should ever face an allegation of wrong doing. This may include a breach of trust, a breach of duty, providing misleading information or wrongful trading.
The director or officer of a company has a duty to ensure that the business is run correctly. Some of these duties are legal requirements, such as recent changes to the Companies Act and make the director personally liable for failure to comply. If that wasn’t enough, the fines that can be made are unlimited.
Actions can be brought up not just by shareholders but also employees, customers, suppliers and regulators.
A Directors and Officers insurance policy will pay for the legal costs in defending an allegation that the director has failed in their duties and any civil damages awarded – an insurance policy would not pay any fines nor prevent the director from being sent to jail.
In some instances, an action could be brought in the Companies name and it would be prudent to extend the policy to include cover for the business itself. This extension is called an Entity extension and some insurers refer to their insurance policy as a Management Liability policy.
Where the Entity extension is taken it is also possible to additionally cover any Employment Practices Liability. This extension of cover provides insurance against the legal costs in defending a claim made by employees for claims involving unfair dismissal, discrimination or other employment practice related issues.
Directors and Officers insurance should be considered a must have cover for anyone in a position of responsibility.
Even directors within a small family business could face a claim, so this type of insurance is not just for larger FTSE 100 companies.
It’s possible that there may be a contractual requirement for the business to arrange cover on behalf of their directors, non-executive directors and there may be an ongoing need to cover directors that have retired from the business.
Resident Associations and Resident Management companies, committees and clubs should also consider arranging cover.
Charities and other not for profit organisations also need to arrange cover, although they may need a more specific type of policy called Trustee Indemnity insurance, reflecting the more specific role of trustee.
Be Wiser can help you find the most appropriate Directors and Officers insurance quote for your business. The cost of this cover is surprisingly low and our dedicated advisors are ready to take your call today on 0800 0420 401.