Commercial Insurance

Management Liability Insurance

Being in such a position can leave you vulnerable to third-party claims. Protect yourself and the future of your business with an extensive insurance policy.

UK legislators are increasingly scrutinising the role of those running businesses and placing legal liability for incidents and situations on the shoulders of individuals running companies, charities and other organisations, rather than penalising the corporate balance sheet. There is a wide-held misconception that Limited Company status protects individuals from legal liability. This is not so. Any decision maker could have to pay claims from their own pocket.

With a director or officer’s liability unlimited, and an imposition of an ongoing charge on your salary a possibility, if the value of your savings and the sale of home, car and other assets cannot together pay a claim, running the risk of being in this position is a gamble.

When you could potentially be sued by a regulatory body, customer, competitor, employee, supplier, creditor, shareholder or contractor – with this list not exhaustive – protection is vital. With the definition of ‘officer’ so vague, very few managers are ‘out of view’ and ‘safe’.

D&O insurance is relevant to those running businesses because it:

• steps in if a director or officer faces allegations of wrongdoing and needs to respond, or if a legal case is brought against them. The cover allows a legal team to investigate allegations, prepare a response and defend the insured in the relevant court.

• prevents the individual from having to pay significant legal costs, even if there is no case and no wrongdoing has occurred.

• protects an individual’s personal assets and all they have worked for, by paying both expensive defence costs and financial costs on their behalf, should a case move to court.

• minimises disruption caused by a case, by providing legal expertise to assist with case investigation and preparation.

• provides moral and professional support, at what can be a hugely stressful time.

• covers a wide range of directors’ duties as specified by the Companies Act. In reality, a director or officer could be sued for anything, ranging from negligence in a health and safety breach, to environmental pollution, harassment, discrimination or wrongful dismissal, illegal trading, fraud, pension scheme mismanagement, defamation or a large number of other breaches of duty and trust.

Employment law is continually being updated and is in flux, post-pandemic. Legislation is increasingly strict and regulation ever-tighter. Employees are more rights-aware than ever and the business world more litigious than in the past. Even innocent mistakes can have huge repercussions for business owners. Directors & Officers insurance is a layer of resilience you probably really need.