DIRECTORS & OFFICERS INSURANCE Safeguarding leadership from corporate liability risks

Why do I need Directors & Officers Insurance?

Under the 2006 Companies Act, directors and officers are exposed to over 200 areas of statutory liability. Directors & Officers Liability Insurance (D&O) is designed to indemnify directors and officers from claims against them personally for failing in their duties.

Even if your company has limited liability, individual directors do not, making them personally vulnerable. Cover can be extended on some policies to include all individuals in management positions, pension trustees, employment practices, fidelity and entity cover.

If a company has limited status, it has a degree of protection, but directors/partners can have unlimited liability. As such, directors of Limited companies, Limited partnerships or Community Interest Companies would be sensible to have the protection this insurance offers – noting that it should be in addition to good and safe working practices, not instead!

Voluntary organisations, clubs, and societies should consider protecting their committee members with trustees’ and committee members’ liability insurance, which offers similar protection.

Who could make a claim against a director or officer?

• Employees
• Shareholders
• Customers
• Government bodies (HMRC/HSE)