Directors and Officers

Why do you need Directors and Officers Insurance?

Here’s just a few areas where claims could be made against you:

  • Health & Safety at work act
  • Data Protection Act
  • Transparency Obligations
  • UK Companies Act 2006 (hundreds of possible offences)
  • Racial and Sexual Discrimination
  • Ageism and Disability Discrimination
  • Insolvency Act (wrongful trading)
  • E.U. Directives and Regulations
  • Consumer Protection
We could go on if you like, but if you’re still unconvinced may be we should explode some myths.

  • Directors have limited liability – NO THEY DO NOT!
  • I don’t have a title director, so I can’t be held liable – YES YOU CAN!
  • The company can indemnify us – NOT IF IT GOES BUST!
  • We are only a small company – THE SAME LAWS GENERALLY APPLY!
  • They cannot touch my personal assets – YES THEY CAN!

If none of this has changed your mind you are truly an exceptional director! On the other hand, if you would like to find out more about costs and cover to protect your company’s directors and officers from being sued, visit our Directors and Officers Insurance website.

Notes on Professional Indemnity & Directors & Officers Liability Insurance

Very often we get asked by clients, what is the difference between Directors & Officers Liability and Professional Indemnity Insurance covers.

If you ran the two policies side by side you would soon be able to compare the covers.

Professional Indemnity Insurance will cover the organisation or business against professional neglect, errors, omissions and a collection of other areas depending on the Professional Indemnity Insurance policy type.

Naturally within the business or organisation there maybe directors and officers giving advice and therefore they would be covered under the PII policies, as they were acting on behalf of the business or organisation in a professional capacity.

What Professional Indemnity Insurance would not cover would be claims against the individual directors for mistakes and errors they may have made based on the corporate structure. Such as Health & Safety at work at work, Data Protection Act, Transparency, UK Companies Act 2006, Racial & Sexual Discrimination, Ageism Discrimination, Consumer Protection, EU Directives and Wrongful Trading.

The important differences with in the policy structures of Professional Indemnity Insurance and Directors & Officers Liability Insurance in general terms is that PII policies cover ‘professional advice’ based on the named organisation, person or company and its subsidiaries. The D&O policy covers the individual directors not the company or organisation itself although some Directors & Officers Liability policies can be extended to include cover for the entirety/company and its directors.

So in Brief:

Professional Indemnity Insurance covers legal and damage costs for professional advice given within the structure of a company organisation.

Directors & Officers Liability Insurance covers legal costs and damages awarded against the individual directors based on corporate claims, not professional advice (I.e. mistakes made when running the company such as previously described).

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Directors and Officers