Directors and Officers Insurance covers legal costs from defending these allegations, as well as compensation in the case of an unsuccessful defence. These claims are for wrongful acts committed by a senior member of staff representing the company and could include breach of trust, neglect or misuse of company assets, to name a few. Regardless of the size of the company, experts are strongly advising that all businesses with a board of directors should invest in Directors and Officers Insurance.
Robert Lewis, Corporate Broking Director at Towergate Insurance Brokers, said: “A company’s directors are likely to have responsibilities which pose a higher risk for claims by stakeholders, shareholders, or regulatory bodies. Should an allegation or claim arise, directors’ and officers’ personal finances are at risk. Even if the case doesn’t go to court, the allegation will still need to be investigated and this can incur significant costs. By investing in Directors and Officers Insurance, all senior members of the company, including past and present, have increased protection from claims arising whilst acting on behalf of the company.
“The size or revenue of a company does not affect the likelihood of allegations being made over directors’ management of company affairs, so it’s recommended that all companies, including non-profit organisations, invest in Directors and Officers Insurance to provide security for all senior members should any issues arise.
“If a business does not have this coverage in place its directors and officers will find themselves personally liable against any claims and potentially unable to defend themselves. The consequences could include disqualification, criminal prosecution, custodial sentences, bankruptcy, financial hardship and damage to wellbeing for all involved.
“As a company leader, maintaining a stable and secure work environment is crucial. Investing in Directors and Officers insurance will provide support for individuals in regards to alleged wrongful acts carried out as directors or officers.
“This insurance package can be combined with additional employment practice liability and corporate legal cover to provide thorough protection.”
Towergate Insurance Brokers is one of the UK’s leading independent insurance brokers and risk management advisors. Boasting an experienced team of insurance specialists, Towergate Insurance Brokers has built a solid reputation for understanding many business sectors and industries, and the everyday risks that they face in today’s increasingly complex world. They also look after the insurance needs of private individuals and families seeking tailored personal covers.
Towergate Insurance Brokers is a trading name of Towergate Underwriting Group Limited.
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