Directors and Officers Insurance

Directors are not always aware of what their duties are and ignorance is no defence.

Directors and Officers of Limited Companies have a common law duty to carry out their duties on behalf of the Company with the same level of care that they would when dealing with their own affairs.

With new areas of legislation being imposed almost daily (such as the Corporate Manslaughter Act) and the responsibilities/duties of Company Directors and Officers growing at an alarming rate, it seems that unless you have the luxury of a dedicated HR team monitoring changes regularly, you and your company could be exposed.

The small firm Director is more clearly identified as being the 'directing mind' of the Company, and is therefore more easily targeted when someone seeks to apportion blame. In employment discrimination cases, claimants are invariably advised not only to sue the company but also the Director concerned.

If a Director is perceived to have failed in any of his duties then a claim could come from any one of a number of third parties including:-

• Shareholders
• Creditors
• Government and Regulatory bodies
• Employees
• Auditors
• Liquidators
• Customers
• Suppliers

The stress and financial burden can be removed by taking out a Directors' and Officers' Liability Policy.

It covers three key elements:-

• Legal defence costs in both civil and criminal cases
• The payment of damages, compensation or awards to claimants
• Company reimbursement in respect of the Legal Defence Costs

Although many of the actions brought against individual Directors are frivolous, substantial costs can be involved. The policy clearly provides peace of mind, without which the numbing effect of a big bill for legal fees, coupled with a possible award for compensation, can be totally demotivating.

Call our office for a quick quote from our panel of top UK insurers or alternatively, complete the online contact form and we will call you to discuss your requirements.