As a company director, there are a variety of responsibilities placed upon you to act with care, in good faith, within the law, to act in the best interests of the company and indeed a responsibility to ensure that other Directors also do the same. Therefore, a claim may arise against you potentially if someone should allege that you have not met any of these responsibilities.
What Is Directors & Officers Insurance?
D&O insurance policies offer liability cover for company managers to protect them from claims which may arise from the decisions and actions taken within the scope of their regular duties. The core purpose of a D&O policy is to provide financial protection for managers against the consequences of actual or alleged ‘wrongful acts’ when acting in the scope of their managerial duties. The D&O policy will pay for defence costs and financial losses.
Why Do Companies Need D&O Insurance?
To put it simply, managers can make a mistake (a wrongful acts) and are often personally legally liable for them. A wrongful act includes:
- Claims for breach of duty, breach of trust, negligence, defamation, breach of warranty or authority
- Allegations of involuntary, constructive or gross negligence manslaughter or claims under health and safety legislation
- Legal representation costs for individuals at other official examinations, enquiries or investigations
- Claims arising from pollution
Who Is Covered?
All current, future, and past directors and officers of a company and its subsidiaries are covered under a D&O policy plus officers and staff members who assume a statutory responsibility through their role in the organization such as the Company Secretary or Health & Safety Officer.
What Is Excluded?
Typical policies would exclude the following;
– Fraud
– Intentional non-compliant acts
– Illegal remuneration or personal profit
– Property damage and bodily harm
– Legal action already taken when the policy begins
– Claims made under a previous policy
– Claims covered by other insurance
Who May Make A Claim Against A Director or Officer?
– Government / Regulatory Bodies
– Shareholders
– Employees
– Creditors
– Competitors
– Contractors
– Customers
– Liquidators/Receivers
– Third Parties
– Purchases
– Other Directors
How Can We Help?
At John Heath Insurance Brokers we are able to assist with all of your Directors & Officers insurance policy requirements. Please do not hesitate to get in touch with a member of our team to obtain a quote or if you have any questions in regarding the policies that we can offer.