Directors & Officers Liability

It’s a common misconception that directors & officers of limited companies have no personal liability for their actions at their firm.

In reality, they can be held accountable for poor decisions, mismanagement and other breaches of the Companies Act, even if their actions were done with the best intentions.

Allegations of negligence by directors and officers can be costly to defend; the legal costs alone can cost thousands of pounds. Without directors and officers insurance, you may have to pay the defence costs (and any subsequent compensation payments) out of your own personal wealth.

Summary of covers

Directors & officers Liability (also known as Management Liability Practices (MLP))

Legal costs, awards and settlements for any claim or regulatory action brought against any past, present or future director, officer or employee.
Legal costs of representing any director, officer or employee at an official investigation

and much more

Employment practices liability (optional cover)

Legal costs, awards and settlements for any employment claims brought against you or any past, present or future director, officer or employee.
Legal costs of representing any director, officer or employee at an official employment investigation.
Automatically includes all subsidiary companies including any subsidiaries acquired during the period of insurance.
Claims arising from breaches of TUPE (transfer of undertakings protection of employment) legislation.

And much more

Company legal liability (optional cover)

Legal costs, awards and settlements for any claim or regulatory action brought against you.
Claims arising from the exit of the United Kingdom from the European Union (Brexit).
Legal costs of representing you at an investigation.
Automatically gives cover on the same terms to all subsidiary companies including any subsidiaries bought during the period of insurance.
Claims against your business caused by the operation or administration of any pension or employee benefit scheme.

Our markets

Directors & Officers Claim Examples

Health and safety investigations

An employee of our insured was asked to attend an interview under caution by the Health and Safety Executive. A member of the insured’s staff had suffered injury following a fall whilst working from height. Insurers provided support and paid for costs for legal representation.

Our insured, a carpentry firm, had a Health and Safety Executive enquiry after an employee was seriously injured whilst falling through a roof. Cover was provided under the directors and officers’ and corporate legal liability sections of the policy.

Trading standards prosecution

Our client, a packaging company, faced charges made against them by a local trading standards office. The prosecution was successful resulting in a fine of just £750.

However we paid our insured’s costs of just over £40,000 which also included payment of a costs order in respect of the prosecution’s costs.

Representation costs

Our insured were raided by the UK Border Agency police. A number of their staff were taken away together with documentation.

Insurers provided cover for legal representation and investigation costs that were incurred.

Employment practice liability claims

Our insured, who worked in the IT industry, had support from an external HR consultant who advised on the dismissal of an employee for gross misconduct for alleged aggressive behaviour.

There were a number of procedural failings in the dismissal process which was compounded by the fact that the HR consultant had sent very damaging emails. The emails were discloseable as part of the tribunal process which meant that settlement was a priority before disclosure.

The claim settled for £25,000.

The insured, who supplied and fitted electrical equipment, dismissed a sales manager by reason of redundancy but did not follow a fair procedure. The dismissed employee brought a claim for unfair dismissal and age discrimination.

The matter settled at an early stage for £10,000.

The insured, a catering company, dismissed an employee for poor performance and subsequently received a tribunal claim for unfair dismissal, whistle-blowing and failure to provide written reasons for dismissal.