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Directors and Officers
(including Legal expenses and bonds)
As a Director of the business you can be held personally liable for decisions you make for the business. So how can your protect yourself against the risk or personal prosecution?
The Directors, Officers and Senior Employees of your company can be personally liable for the decisions they make. Furthermore, this liability is unlimited, which means individuals cannot rely on protection from the corporate body that employs them.
Directors’ and Officers’ liability insurance – also known as D&O insurance –offers protection in respect of claims brought against you for actual or alleged wrongful acts of key decision makers in your business.
These wrongful acts can include:
- Breach of trust
- Breach of duty
- Misleading statements
- Wrongful trading
Directors and Officers have specific responsibilities and duties relating to the business and their role within that business. 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.
Claims can be made by an ever-widening source, including but not limited to the Health & Safety Executive, employees, environmental groups, regulatory bodies, creditors, banks, shareholders, investors, customers and suppliers.
Statutory exposures include:
- The Companies Act
- General Data Protection Regulation
- Company Directors Disqualification Act
- Insolvency Act (Wrongful Trading)
- Company Securities (Insider Dealing) Act
- Consumer Protection legislation
- Health & Safety at Work Act
- Corporate Manslaughter Act
- Financial Services Act
- EC Directives and Regulations
- Racial & Sexual Discrimination legislation
Directors’ and Officers’ liability insurance covers the legal cost of defending these proceedings, in addition to any compensation costs that arise from an unsuccessful defence.
Policy extensions can include:
- Employment practices liability insurance. It covers employee discrimination claims, e.g. for unfair dismissal, harassment, or failure to promote a person.
- You can extend your policy to include cover for defence costs arising from criminal and regulatory investigations into your company where no actual wrongful act has been alleged against a director.
- If required, the policy can be extended to provide cover for breach of contract, misconduct, unfair dismissal, environmental prosecution and fraud.
Please contact us to discuss your Directors and Officers liability covers you need to ensure you and your business are protected.