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Directors & Officers Insurance

A common misconception is that forming a company with limited liability limits the liabilities of company directors and officers. However, directors and officers can be sued in their personal capacity by a wide range of individuals and entities. Without proper cover, they risk their own wealth and the real possibility of personal bankruptcy.

Claims against directors and officers can be brought by a wide range of people, including employees, customers, suppliers, creditors, bankers and shareholders. Furthermore the increased powers of regulators in areas such as health and safety, environment, employment and corporate governance, are fuelling a growth in litigation.

Anyone who takes on a position as a director or officer of a company, residents association or other organisation, or who becomes a trustee of a charity will need to carefully consider the requirement for this insurance.

A Directors & Officers policy will indmenify the individual for their liability in respect of claims made against them arising from any wrongful act committed in their capacity as a director or officer of a company.

A wrongful act includes any actual or alleged error, misstatement, misleading statement, act , omission, neglect or breach of duty, breach of trust, breach of contract, breach of warranty of authority, or other act actually or allegedly committed or attempted by any person in their capacity as a director or officer.

It is worth labouring the point that you don't have to be guilty to be sued. There are also plenty of examples of directors found personally liable when they haven't been dishonest or fraudulent. They have simply been found to have not taken enough care. Even an unfounded allegation of wrongdoing needs to be investigated and defended, often at considerable cost.

Please contact your Relationship Manager or

Connie Ngai
Tel: 020 7977 1774

 

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