Many people mistakenly believe that as a director of a limited company, they have no /limited personal liability in regard to their corporate actions. The truth is that while most corporate bodies are protected through Public Liability and other insurances, the individuals within the company are often unprotected, particularly where they have acted without proper authority or breached any part of the Companies Act, however inadvertently. By investing in D & O cover you are provided with crucial protection.
Under the 2006 Companies Act, directors & officers are exposed to over 200 areas of statutory liability. Broadly speaking, personal claims or proceedings against directors or officers can arise from any decision made, or act carried out in the workplace, however innocuous it might have seemed at the time. Claims could come from many angles including customers, employees, shareholders or government bodies such as the Health & Safety Executive or Inland Revenue. The following are just two claim examples:• Employee deaths – two employees were killed whilst attempting to repair dangerous machinery. The company’s managing director and several technical managers were prosecuted for breach of health and safety legislation. Defence costs were £890,000 • Pollution – A manufacturer employed a waste disposal contractor to dispose of old oil. Contrary to the manufacturer’s expectations the contractor dumped the oil in a field and then became untraceable. The Environment Agency brought criminal proceedings against the manufacturers’ directors and considerable defence costs were incurred to achieve their acquittal
We can access D & O Liability insurance providing crucial protection to the senior management of a company against claims of wrongdoing from shareholders, employees, customers, competitor companies, government bodies and a multitude of others. A standard policy has a broad definition of wrongful acts and in general will pay for:
We can also obtain quotations for the following linked covers - Corporate Legal Liability, Employment Practice Liability, Pension Fund Trustee Liability and Employee Crime (Fidelity) insurance.
Voluntary organisations, clubs and societies should consider protecting their committee members with Trustees Indemnity (sometimes termed Management Liability) insurance which offers similar protection.