Directors’ and officers’ insurance – also known as D&O insurance – covers the cost of compensation claims made against your business’s directors and key managers (officers) for alleged wrongful acts.

Legal Hammer

Wrongful acts include:

  • breach of trust
  • breach of duty
  • neglect
  • error
  • misleading statements
  • wrongful trading

Do I need it?

If your company has directors or key managers, directors’ and officers’ insurance can cover the cost of compensation claims made against them by employees, shareholders, investors, regulators or third parties.

Directors and officers have specific duties, responsibilities and powers relating to their positions in the company. These are usually set out in their job description or terms of reference. If a director or officer of your company is found to have acted outside of their terms of reference, criminal, regulatory or civil proceedings can be brought against them.

Directors’ and officers’ insurance covers the cost of defending the accused in these proceedings, as well as any compensation costs that may arise from an unsuccessful defence.

If directors and officers do not have insurance, they face a greater risk of not being able to defend themselves against:

  • criminal prosecution which can result in fines or imprisonment.
  • disqualification from holding the position of director.
  • civil proceedings which can lead to substantial legal costs and awards for damages.

What does it cover for me?

Directors’ and officers’ liability covers claims made by:

  • creditors
  • regulators, e.g. investigations by the Health and Safety Executive (HSE)
  • shareholders or investors, e.g. for failure to act in the company’s best interest.

It also covers claims brought in relation to:

  • breach of European legislation
  • insolvency

Are there any additional covers I should consider?

Employment practice liability insurance can be bought as an extension of directors’ and officers’ liability insurance. It covers employee discrimination claims, e.g. harassment, unfair dismissal, or failure to promote a person.

Who should I contact for a quote?

To obtain a quote for directors’ and officers’ insurance contact Richard Gorst or Carrie Arnold on 0151 423 7500.

Registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales and authorised and regulated by the Financial Conduct Authority for investment business