Any person acting as a director or officer (including people who take on the position as trustees of charities, resident associations or other similar organisations) must comply with wide ranging duties when making management decisions (e.g. Companies Act 2006, Health & Safety (Offences) Act 2008 to name just a few).
When accused of an alleged or actual breach of duty they face the threat of an action being brought against them. Investigations by regulators or allegations need to be defended and can take valuable time away from the attention of the directors and officers in addition to costing a significant amount in legal advice. The company may not be in a position to indemnify the director or may have no funds to reimburse if the company is insolvent.
Unlike a company’s liability a director’s liability is unlimited and cannot be contracted out of. Uninsured directors and officers therefore face devastating consequences and the real possibility of personal bankruptcy. Even if a legal action is successfully defended it may still involve significant legal fees.
Directors & Officers insurance can protect the individual Directors’ personal assets but it can also be used to protect the balance sheet of a company.
Please contact us on 01637 876876 or via our contact page if you have any questions or need help with any aspect of Directors and Officers Liability Insurance.