With the current claims climate, it is more important than ever to make sure that not only your business, but also that the directors are properly protected against future claims.
Anyone who has an interest in your business can potentially hold the directors responsible for breaches in their duties or errors and omissions. This could include a disgruntled employee who believes they have been treated unfairly, the HSE who could hold a director responsible for not ensuring the workplace has adequate processes and procedures to provide a safe working environment. It could even be a customer who has been affected by a service or product supplied to them.
Many directors are unfortunately not aware that in the event of a claim, they can be personally sued and their personal assets placed at risk if they are proven to have failed at their professional duties as a director. We feel the Director and Officer’s Product is an essential addition to your business insurances.
Here are some reasons why it is a product that should strongly be considered:
- Employment practice claims remain a large threat to directors. In today’s litigious society employment disputes such as sexual harassment or wrongful dismissal can result in huge settlements.
- Small companies are just as vulnerable as large companies and they face exactly the same risks and regulations as their larger competitors but don’t often benefit from in house HR or legal teams.
- Director’s personal assets are at risk if a director has been accused of breaching their duties. They will be personally liable to defend the claim which may but these assets as risk.
- In the event of bankruptcy or insolvency, creditors may pursue legal action against directors if they feel they have not acted in their best interests.
- Directors and Officers insurance premiums are currently very competitive, especially considering a claim can run into hundreds of thousands, if not millions of pounds.
- Defending legal action can also be costly without Directors and Officers insurance and may run into tens of thousands of pounds even in the event of an unfounded allegation.
- Directors and Officer claims are NOT covered under any other part of your business package. It is commonly thought that the alleged misconduct by directors or companies is covered under other liability policies such as Professional Indemnity, however this is not the case.
- Investigations by regulators are more common and more costly, but these costs can be insured against.
Brooks Braithwaite have access to a large market of insurers and will look to match the best provider to your business whilst understanding your needs and expectations. Should you have any further queries or would like a quote then we would love to hear from you.