What is Directors and Officers Insurance?
Directors are now facing more challenges and greater responsibilities than ever before. It is often the case that Directors of Limited companies feel they are financially secure as their liability is protected by the corporate veil. However, Directors need to be aware that their personal assets are at risk if they are found to be in breach of their duties as a Director of a company.
The following represents some areas where a Directors and Officers policy can be of vital assistance:
The Companies Act
The Companies Act 2006 was fully implemented in October 2009. Not only Directors but also persons deemed to be Directors, now owe statutory duties to the company, breaches of which can lead to unlimited personal liability in a wide range of circumstances.
Health & Safety
The Corporate Manslaughter and Homicide Act 2007 created a new offence of corporate manslaughter; however Directors need to be aware that they are still accountable under pre-existing Health and Safety law and Directors can be held personally liable for Health and Safety breaches.
Employment Act 2008
It is not only the Employer but also individual Directors who can be named in Employment Tribunal claims. Individual Directors can also be held liable for acts of harassment and discrimination towards employees.
Equality Act 2010
This Act gives employees protection for eight “protected characteristics” ; namely age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. It also extends to include associative discrimination meaning employers including Directors can now be held liable for acts of harassment and discrimination by third parties such as customers or suppliers.
Bribery Act 2010
The Act has two general offences, that of bribing another person, and the offence of agreeing to or receiving a bribe. The Act as creates a specific offence namely failure of a commercial organization to prevent bribery and bribery of foreign officials.
The Key Benefits
Directors and Officers Insurance protects the individual for covered losses, civil and criminal defence costs and other costs that are not indemnified by their company.
Cover can also be extended to provide coverage to reimburse the Company were it has indemnified its Director.
Please contact us to discuss the best insurance product available for your circumstances.