If you are a director, partner or officer of a company, you have a certain responsibilities towards your employees, members of the public, investors and regulators. This position also exposes you to personal liability, which could lead to payment of compensation. You can rely on us to offer directors’ and officers’ liability insurance. Speak to a member of our team now for more information.

Directors and officers insurance policies are specially designed to protect directors and officers of limited companies, and are therefore different to other company policies, which are designed to protect the company rather than the individual directors and officers for their personal liability.

That said, cover can also be extended to include the liability of the company itself. These are also known as entity covers.

So why do you need directors and officers cover? Directors and officers are responsible for running the business of the company and if a third party suffers financially because of the actions of the directors and officers, they may bring legal action against them.

Unlike a company’s own limited liability, directors’ and officers’ own personal liability is unlimited. A director may not be able to rely on receiving financial assistance from their company in the event of them being sued in their capacity as a director, perhaps because their company has no funds (directors are often sued when the company is insolvent) or their company may not be permitted to indemnify them.

If directors and officers cannot receive financial assistance from their company and they have no directors and officers insurance, then they would have to pay the loss settlement and defence costs from their own personal assets and wealth.

The Companies Act 2006 also places greater responsibilities on directors of companies and the introduction of The Corporate Homicide and Manslaughter Act 2007 has recently added to these responsibilities.

Directors and officers insurance provides cover for legal defence costs and compensation brought against a director for a ‘wrongful act’.