A liability insurance warning for directors and officers
Being the head of a company or organisation means that you have a great deal of responsibility for how the business operates, but it also exposes you to countless legal risks.
Directors and CEOs are more vulnerable to lawsuits and other legal issues because they are the decision makers in the company, the people who authorise every action on the company’s behalf.
For example, if a disgruntled client complains about an aspect of your company’s service – a mistake that has been made or a fraudulent act committed – you as the director may be held liable in a lawsuit.
However, most large companies have a professional indemnity policy in place to cover errors, omissions and fraudulent behaviour (amongst many other issues). The problem is that this doesn’t always protect directors and officers against individual legal action, despite a company’s Limited status.
If you, as the CEO of a company, are found to be personally liable for a breach of duty or any other wrongful act to the detriment of a client, customer or business associate, you may face extensive fees, fines and litigation costs. Without specially tailored directors and officers liability insurance, you will have to cover these costs out of your own pocket.
Posted by Stephen Heath on July 11, 2010 in Directors & Officers Insurance, News |