Explained: Directors’ and Officers’ Liability Insurance

As a director your responsibilities come from a series of statutory, financial and common law duties to ensure that you act in the company’s best interest. If it is alleged that you are negligent in your capacity as director, you may be held personally liable and your personal wealth could be at risk.

You may believe that you can rely on your company to indemnify you but this is not always the case, either because it is against the law or bye-laws of the company, or financially, they are unable to do so.

Directors’ & Officers’ Liability Insurance protects companies’ directors, officers and senior managers against claims arising from their decisions and actions taken whilst managing their business. The policy covers defence costs, settlements, damages and claimant costs. Unlike a commercial legal expenses policy, there is no condition of agreement that requires reasonable grounds for success to be needed in order for the policy to pay, so cover is provided for defence costs from the outset.

Claims can come from a number of third parties including Shareholders, Employees, Competitors, Auditors, Liquidators and Government & Regulatory bodies to name but a few.

Whether your company is big or small the same laws apply so if you want to protect your own costs, time and reputation then D&O Insurance should be considered.

For help and advice about Directors’ and Officers’ Insurance please contact Adam Lawrence, Client Manager on 0118 916 5484, or complete our enquiry form.

*Information correct as of 1st May 2016