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Directors & Officers Insurance

directors-officers

As a company director or officer you have certain personal liabilities, that through negligence, default, breach of duty or breach of trust in relation to the business may leave you open to prosecution. With exposure to these potential claims, lawsuits, investigations you could incur very large legal costs and expenses as you seek to defend yourself.

If you have an award made against you. You would have to finance such action from your own resources including the settlement of any successful claim which, at worst, could put at risk your home, car, savings and any other assets.

Directors and officers liability insurance is designed to provide cover for legal defence costs and, where appropriate, any final settlement or compensation award.

Risk areas

We live in an increasingly regulated world and our specialist directors & officers insurance policy provides cover for losses resulting from wrongful acts including:

Coverage

  • Health & Safety
  • Sexual, racial, disability or age discriminations
  • Wrongful and constructive dismissal
  • Pollution / Environmental issues
  • Trading in the knowledge that the business is or will become insolvent
  • Involuntary, constructive or gross negligence manslaughter
  • Competition or cartel activity
  • Copyright and other intellectual property
  • Data protection act
  • E commerce business exposures
  • Tax contributions where the company has become insolvent and personal liability ensues

Claims examples

The following claims examples are for illustrative purposes only and are not a guarantee of cover which is always determined on a case-by-case basis in accordance with policy terms and conditions:

  • An officer of the company was sued by his distributor for deliberately breaching an exclusive contract and for using commercially sensitive information within the agreement for his personal benefit. The policy funded all the defence costs of £ 250,000.
  • A director was sued by various shareholders for negligence, after the company’s profits declined rapidly. After consultation with solicitors, it was the best course of action to settle out of court for an undisclosed amount. The policy funded both the legal costs and the final settlement. The director would clearly been facing personal bankruptcy without the policy.
  • HSE investigated a workplace fatality which then turned into a public enquiry, which the company director was to attend. The policy covered his legal representation and enabled him to demonstrate that the fatality had not arisen out of any negligence or wrongful act on his part or any other director or officer within the company.