Protecting Your Business’s Greatest Asset ,

The Directors’ and Officers’

Directors’ and officers’ insurance – also known as D&O – does what it says on the tin in as much as it protects your business’s senior people should they become involved in legal disputes. D&O cover protects senior leaders of businesses from financial loss if they incur legal action as a result of their business’s activities. Historically it has been a protection that was used mainly by large corporations, but as we have become a more compliance-heavy world with a greater use of the courts to settle disputes, so it’s a policy that is now being picked up by small and medium-sized businesses too.

What Can Directors’ and Officers’ Insurance Offer You?

With D&O cover you can rest assured that you’re covered from an array of potentially costly legal actions arising from things such as:

• Employment practises and human resource issues
• Failure to comply with regulations or laws
• Negligence or failure to carry out their job adequately
• Financial and or other company reporting errors
• Inaccurate or inadequate disclosure
• Misrepresentation in a prospectus
• Claims arising from investors or shareholders who blame executives personally for either losses or a lack of satisfactory returns
• Inaccurate or inadequate disclosure, e.g. in company accounts
• Decisions exceeding the authority granted to a company officer – in other words someone taking an action that they were not allowed to

Examples of such claims include:

A slander allegation was made by a customer against a company owner following an argument at a meeting. Having D&O protection in place, the company was able to avoid court action by making a payment that was covered by the policy

Investors in a replacement window manufacturer sued a company’s directors for losses incurred by them overstating the financial health of the business

A worker was sacked for gross misconduct after assaulting a colleague at work and for bringing the company into disrepute. The employee sued for unfair dismissal saying he was provoked. The case failed and the business was able to claim back the legal expenses it incurred defending it

Who Can The Cover Protect?

While that may sound like a silly question, D&O is a flexible policy that can cover more company members than you might think:

• An unrestricted definition of directors or officers covering all types of past, present and future, executive and non-executive and officers
• Managerial and supervisory employees who aren’t board-level directors
• All employees for employment-related wrongful acts
• Employees as co-defendants
• Retired directors other than those retired because of disqualification from holding office
• Outside directors who, at the request of the company, serve on an outside entity board