Directors & Officers Liability insurance is probably one of the least well understood types of insurance available to organisations.
Directors & Officers liability insurance is designed to cover the cost of compensation claims made against your business’s directors and key employees/managers (officers) for alleged wrongful acts.
Some reasons as to why you may need D & O insurance are as follows:-
- Employment practice claims such as sexual harassment or wrongful dismissal are increasing and can result in huge settlement amounts
- One of the primary drivers of claims within the UK are fines and investigations imposed by regulators such as the HSE
- Creditors may take legal action against directors if they feel they have not acted in their best interests if faced with bankruptcy or insolvency
- Legal costs for defending any allegations against the company or one of its directors can often run into tens of thousands of pounds
- Alleged misconduct by directors or companies is not covered under any other liability policy, including Professional Indemnity
As you can see from the above, the insurance covers quite a broad range of scenarios, especially as claims can come from within an organisation or from a third party.
We require fairly limited information to set up a Directors & Officers Liability policy, including which entity or entities are to be covered, where they are located along with previous years’ income and total assets. We also need to know about any redundancies, employment disputes and previous claims.
If you would like any further information regarding the class of insurance, please contact me.