Whether we like or not, directors of all companies can be held personally liable for the actions and decisions they make on behalf of their company.
Many forget that the directors of a company and the company itself are separate legal entities. This means that not only can they be jointly liable, but separately also.
With the threat of personal litigation against Directors and Officers at an all time high, the need for adequate protection has never been greater
A few facts:
The majority of UK companies now carry Directors’ and Officers’ insurance
Directors are identified by role & duties, not by title
The Law does not distinguish between executive and non-executive directors
EU directives go much further than present UK practices
Directors have unlimited personal liability
Covers can be provided under various forms of Directors’ and Officers’ liability policies (often known as D&O policies)
So what does a D&O policy cover?
In general terms: Mismanagement
An example of an insuring clause is:
“… Any actual or alleged breach of duty, breach of trust, neglect, error, misstatement, misleading statement, omission, breach of warranty of authority or other acts by the directors, managers, officers …”
The list of how claims can arise is almost endless, but the more notable include:
The Companies Act
Trade Descriptions Act
Health & Safety at Work Act
Insolvency Act
Environmental Protection Act
Data Protection Act
From Customers, Competitors and Regulators
We have specialist capabilities in placing D&O insurance and this includes such specific sectors as Financial Institutions and Technology business. As you would expect, our management liability team is able to guide you in this respect.
Towergate ghbc is a trading name of Towergate Underwriting Group Limited and is authorised and regulated by the Financial Services Authority.
You can check our details on the FSA register (www.fsa.gov.uk/register) under Firm Reference Number 313250
