Directors' and Officers' Liability

The Companies Act (1989) makes directors and officers personally responsible for many business decisions they make. Claims can come from a variety of sources – employees, regulators, shareholders and creditors – and at any time, even after retirement. Normally, the company cannot help either, if a claim is made against a director or officer they must usually meet the costs of defending themselves and, if found to be at fault, any settlement required.

It's surprising then that Directors' & Officers' cover is not considered a core insurance purchase, and recent research by Zurich UK Commercial indicates that almost 50% of SME's do not have cover.

It appears that small businesses are not aware of the personal financial risks that they face. SME's are no less vulnerable than larger companies, with less time and resource to understand and manage the risks they face. The financial consequences for smaller firms and the individuals concerned are also likely to be proportionally greater.

Directors of SME's are faced with growing challenges in the form of a variety of legislation, including the recent passing of the Financial Services and Markets Act, the Enterprise Acts and the proposed legislation dealing with religious or sexual orientation. We are in a society where individuals are increasingly aware of their rights, teamed with the responsibility for compliance with Health & Safety and ER directives placed on the director, one heat of the moment decision could result in personal financial ruin.

It has become apparent that once directors and officers understand the complexities of their duties, they are increasingly seeking adequate insurance protection from the personal financial risks they face.

Many of the business people, with whom we discuss Directors' and Officers' insurance, are not aware of the dangers they are open to personally. When we explain how, as a director or an officer of a company, they can be held personally liable for the actions they take in their day-to-day business, even within a limited company, the insurance cover sells itself.

At NOYCE we have a range of solutions to provide the protection Directors need.

To makes sure that your director’s gets the right protection at the right price call the Noyce Team to protect your Directors and Officers.