Our Directors & Officers Liability Select provides personal liability cover for company directors, officers and managers to protect them from claims that may arise from the decisions and actions taken within the scope of their regular duties.
Here are 10 reasons your clients may need directors and officers insurance.
1/2
A recent report has shown nearly half of businesses have experienced a claim or investigation involving a director in the past 12 months.
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Allen Overy. (2020). Directors Liability report - Allen & Overy. - view source
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96%
96% of insurers advise directors and officers risk is increasing.
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D&O: a look back at 2019 and a look forward to 2020 | Womble Bond Dickinson. - view source
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30%
Directors and officers claims have increased by 30% in the last decade.
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AJG - State of the Market for Directors’ & Officers' - view source
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01
SMEs are just as vulnerable as large companies
SMEs are not exempt from D&O claims, they face exactly the same risks and regulations as their larger peers, but often do not benefit from in-house HR or legal teams.
02
Directors' personal
assets are at risk
If a director has been accused of breaching their duties, they are personally liable to defend the claim. Their personal assets are potentially at risk if they do not have adequate D&O cover.
03
Investigations by regulators are getting more and more common
Investigations and fines imposed by a regulator or body such as the Health & Safety Executive are one of the primary drivers of claims in the current UK business climate.
Claims
example
example
At an engineering company, two employees were killed whilst attempting to repair dangerous machinery. The company’s managing director and several technical managers were prosecuted for breach of health and safety legislation.
Claims example
The director of a management consultancy is quoted in the press as making some derogatory remarks about one of its major clients, based on the information they held about them. As a result, the client sued the company and the directors alleging defamation and breach of confidentiality. The Information Commissioner’s Office is investigating the company and the directors in respect of their data protection obligations.
04
Defending a legal action can be costly
Legal costs for defending allegations against the company or one of its directors can often run into tens of thousands of pounds.
05
Investors
can sue
If investors lose value in their shares as a result of a director or company’s alleged misconduct they could seek compensation via the courts.
6
Employment practice claims remain a large threat to directors
In an increasingly litigious society employment practice claims such as sexual harassment or wrongful dismissal can result in astounding settlements.
07
D&O claims are not covered under any other liability policy
A common misconception is that alleged misconduct by directors or companies is covered under other liability policies such as Professional Indemnity.
08
D&O insurance is more affordable than ever
A D&O policy can cost from under £500 per year, yet the total cost of a D&O claim can run into hundreds of thousands, if not millions of pounds.
09
D&O helps
attract talent
Not having D&O insurance in place may put off talented individuals from joining a company as they will not be protected.
10
Provides peace of mind
Having the appropriate Directors and Officers coverage in place can help individuals to better focus and operate whilst performing their duties for their companies.
Further information
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It must not be made available to anyone other than the intended recipient, either in its original form or any reproduction.
It must not be made available to anyone other than the intended recipient, either in its original form or any reproduction.