Directors and Officers

This type of insurance covers damages and claims expenses associated with a claim made against the business’s directors and officers for alleged wrongful acts, which could come from:

• investors,
• your shareholders or
• the regulators

If this cover isn’t in place, then the management faces a greater risk of financial loss and of not being able to defend themselves against any claim.

In addition having this cover in place helps with recruitment as it offers protection.

No, it isn’t compulsory under UK law

There is no set level required. However, the amount is usually based on the how much the company can afford and how much has been set aside to cope with “risks” The level of liability chosen is the maximum amount of money that the insurer will pay for claims made against the Directors and Officers for a wrongful act that occurred during the policy period.

The cost will depend on several factors

• the age and financial strength of the company,
• the company’s activities,
• the company’s location.

It does not cover the management regarding

• Accidents involving clients or members of the public.
• Accidents involving the staff
• It does not cover the Director or Officer if they make a mistake during the course of their work that causes financial loss.