Directors & Officers Liability Insurance

What is Directors & Officers Liability Insurance?

The law dictates that a claimant can sue a business if they believe they have not been treat fairly and in compliance with legislation. The law also permits that claimant to sue the individual responsible for overseeing the connected activity within the business. That may be Health & Safety, HR practices, Financial Controls etc. The insurance is designed to assist the individual in dealing with the financial implications involved in defending any such claim.  

Is This Something I Need For My Business?

Whatever the size of your company, as a director or officer, claims brought against you by, for example, disgruntled investors, or the legal cost of defending allegations, could end up costing a lot of money.

Directors’ and officers’ insurance can protect you against these types of claims and will cover the cost of defending them. Cover could also include any action seeking your disqualification as a company director, legal expenses incurred to defend an action, or defending criminal and regulatory investigations as well as things like PR crisis management to deal with adverse press attention as a result of them.

Liability insurance for directors and officers typically covers claims made by current or former employees, shareholders, investors, and other people involved in your business:

Shareholders

Claims made by shareholders may happen as a result of lower-than-expected dividend payouts which they perceive to be as a result of an action or decision made by you. Directors’ insurance coverage would pay for legal fees involved in defending a claim, as well as potentially  settlements and awards made in their favour.

Employees

A disgruntled current or former employee may hold you personally responsible for them having to leave their job or believe they have experienced a wrongful termination of their employment as a result of a decision you made. Directors’ and officers’ insurance would cover the legal fees and costs involved in defending a wrongful or unfair dismissal claim.

Third Parties Involved In The Business

If a supplier or customer decides to bring a claim against a company director as a result of a decision they made that resulted in financial losses, without liability insurance, the director is personally liable to pay legal expenses as well as any compensation awarded which could have a huge impact on their personal finances.

Todd & Cue are experts in finding the right insurance policies for businesses to ensure they are protected from a range of risks. Our specialist services can help directors and officers get the right cover to protect them against personal liability.

Get in touch with our team today to discuss your requirements and find out which policy meets your needs as a director or officer of a company.