10 Reasons Why You Need Directors and Officers Cover
1) Directors’ personal assets could be at risk
If a director of your company is accused of being in breach of their duties, they are then personally liable to defend the claim. This means that if your business doesn’t have D&O cover, their personal assets are at risk.
2) Protect against fines and investigations
Regulatory or body inspections, such as the Health & Safety Executive, are becoming more and more common. As a result, fines and investigations are among the top reasons for claims in the current UK business climate.
3) Defending legal action is expensive
It’ll come as no surprise that defending allegations made against your company or one of its directors can be extremely costly, with the potential to run into tens of thousands of pounds. Directors and Officers cover will protect you from escalating legal expenses.
4) Directors under threat from employment claims
Employment practice claims, such as sexual harassment, unfair dismissal and discrimination, are on the rise. Legal costs and potential settlements can often total eyewatering amounts which many businesses and their directors can not afford to pay.
5) D&O claims not covered by other liability policies
It’s important to be aware that Director and Officers claims are not covered by other liability policies. So, if a claim is made against a director or company that does not have this particular type of insurance in place, they will not be protected.
6) Protect against bankruptcy or insolvency
If you’re faced with bankruptcy or insolvency, creditors can seek to take legal action against the directors if they feel they have not acted in their best interests.
7) Investors can sue if you make a mistake
If the shares an investor has in your business loses value because of a director or company’s misconduct, they are entitled to seek compensation through the courts.
8) SMEs face same risks as large companies
Directors and Officers claims are just as likely to be made against SMEs as they are against large organisations. This can be an even bigger risk for the smaller business as they often don’t have the support of a HR department or dedicated legal team.
9) Attract the top talent
The very best employees know what potential risks they are opening themselves up to when in leading positions and will therefore look for businesses that invest in their protection. Not having D&O insurance can put the top talent off.
10) Low cost for peace of mind
Policies for Director and Officers cover can be as little as a few hundred pounds per year, a drop in the ocean when compared to how much defending claims and paying compensation can run into.
To find out more about Directors and Officers Insurance, please don’t hesitate to get in touch with Lansdowne Woodward, one of the South’s leading, independent insurance brokers with over 15 years of experience. Simply call our friendly team today on 01202 874989 and we’ll be happy to answer your questions.