Professional Risks Insurance

Directors’ &
Officers’ Liability

Directors, partners and senior employees of a company are exposed to a wide range of risk exposures, for their actions and the decisions that they make. These responsibilities and duties have been established through a mixture of statute, regulations and case law.

Directors’ and Officers’ Liability or sometimes referred to as “D&O” or “Management Liability”, this is a crucial form of protection for board members and the organisation’s management against claims from outside parties alleging “wrongful acts”, i.e. the decisions they make in their day-to-day business functions.

A director cannot hide behind the limited liability of the company, nor necessarily rely on the business to indemnify them. A director has unlimited liability for the position held, and their personal assets could be at risk.

In today’s litigious environment, the decisions made by directors are becoming challenged more often and the risk of allegations of “wrongful acts” increases, no matter how spurious. Without Directors’ and Officers’ Liability insurance protection, the cost of the legal defence and any subsequent settlement can prove disastrous for the individual.

A wide range of stakeholders (both individuals and organisations) can be affected by the decisions of those within a company. Some may have incurred direct financial loss as a result, others may be enforcing rules and regulations on behalf of the directors. The range of potential claimants includes: shareholders, investors, regulatory bodies, HMRC, Health and Safety Executive, employees (past and present), customers, competitors, banks, lenders, liquidators or auditors.

The policy will pay all legal defence costs, plus any damages awarded should any claim be successful.

Employment Practices Liability Insurance (“EPLI”) cover can also be included for any claims made in relation to issues covered by employment legislation.

Cox Mahon has a broad level of experience in arranging D&O insurance for a wide range of organisations, including incorporated entities, Limited Liability Partnerships and Partnerships in both professional and commercial businesses.