As you will be aware, a director’s duties range from statutory requirements to those established by case law. This effectively means that they are liable to change at any time. It is no surprise that directors are sometime unaware of their duties. At law though, ignorance is no defence.
Q. Where does that leave you?
Directors and Officers Liability Insurance (often called D&O) is liability Insurance to cover damages or defence costs in the event they are sued for wrongful acts while they are acting in their official capacity for that company.
Directors and Officers must be aware that there is a need to react quickly if an action is brought, and that defence costs accumulate very quickly. D&O cover provides you access to the type of claims expertise required to deal with these types of claims which can be very complex. This will save valuable management time and also cost.
Q. What are the potential consequences if I don’t have this cover?
A. If sued personally as a company director your personal wealth and assets are potentially at risk.
Don’t forget that an organisation itself may be held directly responsible for certain legal responsibilities and an action may be brought against the company. This may be covered by an insurance known as Entity Defence. Examples of how cover operates are the defence of an alleged breach of contract, or possibly a more serious allegation of corporate manslaughter. Additionally the cover may provide costs and legal expenses in a case of identity fraud, where someone else is using your company name!
Do all your Employment Practices comply with the very latest legal requirements? Unsure…thought so! That is why we recommend that you give full consideration to this cover. The insurance would be effective to fund the defence of employment disputes or provide costs to defending an employment or health & safety investigation.
25% of all companies suffer from some form of fraudulent activity. Often this can manifest itself over a period of many years. Crime cover protects a firm from the criminal acts of employees which result in the firm suffering financial loss. Cover is arranged on a ‘loss discovered’ basis which is irrespective of when the act actually happened or began.
In the current economic climate we believe that it is more important than ever before for a company to seriously consider the above covers, which when grouped together are commonly called Management Risks. Please call us on 01244 311033 to discuss you particular needs or contact us and we will get back to you.
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