Directors and officers insurance

As the leaders of your organisation, your company’s director(s), manager(s), supervisor(s) and board member(s) could be held personally liable and may find that they need additional protection. In a role which faces increased scrutiny, and vulnerability when things go wrong, it is important to have support in place should these members of your team face claims, or allegations, from the actions they have taken as part of their job.

People in these roles are likely to have responsibilities which pose a higher risk for claims by stakeholders, shareholders, trading standard or regulatory bodies. Should an allegation or claim arise, directors and officers personal finances are at risk. Even if the case doesn’t go to court, the allegation will still need to be investigated and this can incur significant costs. By purchasing directors and officers insurance this can help cover legal costs which arise during a claim.

The basis of directors and officers insurance, also known as D&O insurance, is to provide financial protection for senior members of staff who face allegations of ‘Wrongful Acts’.

‘Wrongful Acts’ can include a breach of trust of duty, neglect, error, misleading statements or wrongful trading which is carried out by a senior member of staff acting on behalf of your company. ‘Wrongful Acts’ can include both actual or alleged acts committed.

Directors and officers insurance can offer liability cover for any allegations surrounding ‘Wrongful Acts’ which includes defence cost and any financial losses which in some cases can amount to hundreds of thousands of pounds.

This policy can include all active senior members of the company, as well as any previous and future ones, to protect them against any claims that arise from projects that were completed during their term of employment at your company.

Yes, we can cover board members for outside entities, as long as these memberships are specified at the start of your policy. This will exclude PLCs, firms with assets in the USA and a range of Financial institutions – private equity, securities, banking and insurance etc.

In the event that someone acquires more than 50% of your company, or you consolidate with another company please contact your adviser to ensure you are protected.

Our policy can cover the lawful spouse and civil partners of directors in enforcement proceedings against joint assets.

No. There is no minimum or maximum amount for eligibility.

We can offer cover for FCA regulated firms as part of a package policy so you can include it if you are also buying other cover such as professional indemnity.

If you do not have directors and officers insurance, your directors and officers will find themselves personally liable against any claims and potentially unable to defend themselves.

Having D&O insurance in place can reassure your staff that if they find themselves in the position that they need to defend themselves from a claim and the accompanying hefty legal costs, the cover is in place to support them.

Consequences of not being able to defend a claim include being disqualified as a director/officer, criminal prosecution, custodial sentences, bankruptcy, financial hardship and trauma for all parties involved.

Examples of directors and officers claims include:

• Accidents at work

• Breach of fiduciary duty

• Defamation

• Discrimination

• Fraud

• Failure to comply

• Health and safety including corporate manslaughter

• Misrepresentation

• Misuse of company assets and funds

• Negligence

• Sexual harassment

• Theft of IP

• Unfair dismissal

• Withholding information

• Wrongful termination

In many companies, directors and officers insurance is taken out by the company itself as an act of goodwill to protect the leaders of the company.

If a stakeholder was to make a claim against your organisation as a whole then this would not be covered by D&O insurance. It is only applicable if the specified individuals on the policy are being accused of ‘Wrongful Acts’ as individuals.

If you would prefer to spread the cost of your policy you have the option of setting up a Direct Debit to pay your premium in equal monthly instalments through our preferred provider, Premium Credit Limited (PCL).

If you want to know more about our monthly payment option, please read our dedicated page on Direct Debit. To understand more about how PCL work together with Everywhen, please read our Regulatory Information.

If you would like to know more about our monthly payment option, please visit our dedicated Direct Debit page.

Directors and officers insurance can be packaged up with employment practice liability and corporate legal cover to provide a more thorough cover.