admin David is the financial controller at Todd & Cue Insurance. View articles | Contact author

80% of  small and medium sized businesses do not protect  their directors and officers against  personal claims against them although the list of potential and actual causes of claims are growing  rapidly. These range from corporate manslaughter, health and safety and other government actions to   claims from employees, creditors, suppliers, shareholders and customers.  Increasingly, the management of businesses are being personally bought into the litigation process on the ‘someone must take the blame’ culture.  A limited liability company no longer protects management from unlimited liability.

There has always been a range of covers available but often from differing insurers with potential gaps and conflicts between each one.  A new concept has recently been introduced Management Liability Portfolio Insurance which brings together the three main risks faced.  These are;-

• Directors and Officers Liability Covers
• Employment Practices Liability covers
• Corporate Legal Covers

 The policy covers the legal costs of defending the management and business against a whole range of actions from corporate manslaughter, pollution and environmental problems,  to employee and regulatory authorities’ actions. It also pays the costs or financial losses from a number of events such as employee dishonesty, lack of data protection, employee claims, those from other shareholders and many more.

 With solicitors, widening the net of potential defendants on ‘catch all’ basis, it makes sense to have one insurer and policy covering everyone’s interests.  This approach helps bring back the concept of limited liability for shareholders and protects all the management and  businesses against a wide range of   expenses and damages which could potentially cripple them financially.

If you would like an indication of cost for your company please give us a ring.