Directors and Officers
Our Directors & Officers Policy offers the personal protection required for senior members of a business whether you are a statutory director or a manager acting in the capacity as an officer of your company…
Our Directors & Officers Policy offers the personal protection required for senior members of a business whether you are a statutory director or a manager acting in the capacity as an officer of your company. This Insurance is a vital inclusion for any limited company or limited partnerships insurance programme. Now more commonly provided within an insurance coverage known as “Management Liability Policy” which also offers two additional elements of cover firstly Corporate Legal Liability and Employment Practice Liability both of which are detailed below.
Part and parcel of being a statutory director and to a limited extent a shadow director are the personal liabilities you undertake which are numerous and are therefore potentially onerous in the event of an circumstance that could give rise to an action being personally brought against them. Examples of such claims are as follows: –
- Employment issues including claims being brought directly against a director of discrimination or harassment
- Health & Safety breach including Corporate Manslaughter
- Trading whilst insolvent
- Disqualification
- Regulatory Sanction
- Actions being brought by shareholder/s for negligence
- Actions being brought by another director/s
- and any other alleged dereliction of duty in your capacity as a director (excluding any intentional or premeditated criminal action)
In broad terms Directors & Officers liability insurance typically covers:
- Legal Costs, awards and settlements for any claim or regulatory action brought against present, past or future director /trustee / officer or employee
Main policy features *
Corporate Legal Liability (also known as Entity Defence)
This is a Legal Liability policy that protects a company from claims made for wrongful acts. It provides cover for legal costs, awards and settlements for any claim or regulatory action brought against your company (outside of claims that would normally be covered by Employers Liability, Public/Products Liability & Professional Indemnity); some examples of areas of cover are as follows:
- Breach of contract
- Copyright infringement or other intellectual property
- Corporate manslaughter
- Cost of legal representation in respect of an official (HMRC) tax investigation
- Anti-competitive behaviour
In addition some policies extend cover to include limited cover for Fidelity Guarantee (theft by employees) and loss by external fraud.
It is quite common for single claims to be brought in tandem with both the Corporate Legal Liability responding for the action brought against the company and the Directors & Officers Liability for the same action against the Director/s personally. Therefore, it is important for these covers to run alongside each other on the same policy.
Employment Practice Liability
This is a legal liability policy that protects the company and provides legal defence costs, awards, and settlements in the event of an alleged breach of the employment act where an action is being brought by a current, former, or even a future employee.
Examples of claims are as follows:
- Allegations or wrongful termination
- Discrimination
- Hostile work environment
- Workplace harassment and retaliation.
Again, it is possible for single claims to be brought in tandem where the Employment Practice Liability cover responds to the action brought against the company and the Directors & Officers Liability for the same action against the Director/s personally. Therefore, again it is important for these covers to run alongside each other on the same policy.
Typical exclusions include:
- Deliberate, fraudulent or dishonest acts
- Acts intended to secure a personal profit to which the insured is not legally entitled
- Prior claims, investigations and circumstances to which you were aware of arisen prior to the start of the policy
- Any litigation which arose prior to the start of the policy
- Defined benefit pension schemes.
* This information is a general guide only. Adler Fairways will assess your requirements and recommend a bespoke range of insurance solutions to meet your needs. As part of the quotation process, we will provide full details of the specific coverage, benefits, limits, premiums, exclusions, excesses payable, and any other policy conditions that would apply to the insurance we recommend for you. We currently only offer cover to businesses registered in England, Scotland, Wales, Northern Ireland, the Channel Islands and the Isle of Man.
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