Directors and Officers Insurance

Taking the right Directors and Officers insurance isn’t about avoiding blame, it’s the best way to ensure that you are protected from claims of actual or alleged wrongdoing.

Directors and Officers Insurance (also known as Directors Liability Insurance, D&O Insurance or even Management Liability Insurance) provides an indemnity to directors and senior officers for failure to act according to the best interests of the company, for breach of companies act rules and regulations, and indeed any other alleged wrongful act.

Directors and Officers Insurance  covers a wide range of scenarios. From breach of trust, breach of duty, neglect, error, misleading statements or wrongful trading, there are many ways that an action can result in claims being made against a director or officer.

If your company has directors or key managers, Directors and Officers liability insurance can cover the cost of compensation claims made against them by creditors, shareholders, investors, employees, regulators or third parties.

Often, claims can be made by regulators, potentially following investigations by the Health and Safety Executive (HSE), or perhaps by the Office of Fair Trading (OFT).

Directors and officers have specific duties, responsibilities and powers relating to their positions. These are usually set out in their job description or terms of reference. If a director or officer of your company is found to have acted outside of their terms of reference, civil, criminal or regulatory proceedings can be brought against them.

Directors and Officers liability insurance covers the cost of defending these proceedings, as well as any compensation costs that arise from an unsuccessful defence.

Who Needs Directors Or Officers Insurance?

As a director or officer of a company, charity or not-for-profit organisation, it’s possible that charges of neglect, errors of judgement or breach of duty could be brought against you. The charges may be based on actual events and be reasonable, or wholly unfair.

Either way, you need the right cover to ensure that costs do not adversely financially affect you or the business.

One thing is certain: because your company has limited status does not necessarily mean that you will be protected from potentially unlimited personal liabilities. That’s a daunting prospect, possibly life-changing for you and your family.

Directors and Officers Liability Insurance helps to plugs the gap in Directors’ exposure where the company cannot indemnify them.

When you give 100%, with the right intentions, the last thing you need is uncertainty that one action could potentially ruin years of hard work.

As a senior figure within a company or organisation, having to deal with a claim could result in you having to pay for several layers of costs. Initial investigation costs to determine blame, your defence costs, and of course the resultant damages!

Directors and officers insurance provides the cover to deal with the legal costs and expenses that arise when defending a claim. It could also cover any compensation that is subsequently payable to rectify any mistake or errors that have impacted on your client.

Personal Assets Are at risk without proper cover

When you are a director or officer at a company, you have certain responsibilities; to your employees, to investors and regulators, and of course to members of the public.

It’s hard enough running a successful business without worrying about lengthy court cases.  Directors and officers liability insurance gives you the back-up you need. Without this cover your personal assets could be seized to cover costs and compensation.

You can do something about it. John Heath Insurance has worked with hundreds of professionals who needed cover that gave them peace of mind and enabled them to work in confidence.

We have a wealth of experience in the Directors and Officers Insurance field. We’ll give you straight-forward advice to suit your requirements that will let you get on with running your business.

With cover in place, you will be confident that you and other insured directors or officers are adequately protected in the event of a claim being made, something that could have wider implications for the business if you or your fellow directors are unable to focus your efforts on the day-to-day operational duties.

As ever, if you would like to know more about Directors and Officers Insurance cover, or you’d like to speak with a John Heath adviser, please contact the team.

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