Why it has never been more important to have Director’s and Officer’s Liability cover

You may be financially liable for costs arising from any alleged wrongful acts in your company. Here’s what you need to know about Director’s and Officer’s Liability cover.

Holding a senior position as a director or an officer of a business is something that many of us aim for in our careers. But that responsibility also comes with some potentially huge liabilities if anything goes wrong on your watch. 

It could be a claim about an unfair redundancy from an unhappy former employee. Your company might be the subject of a trademark dispute with a competitor. Or, without your knowledge, your fellow directors might have been involved in a scheme to defraud the business. Whether it was your fault or not, you may still be exposed financially.

So how do you protect yourself personally against these kinds of costs?  

What is Directors and Officers Liability insurance?

Directors and Officers Liability insurance is specialist cover that is designed to protect company directors and officers against any personal loss in the event of legal action or a compensation claim being taken against them for a ‘wrongful act’. 

Directors and Officers Liability insurance can protect both current and former directors, officers and executive directors against personal losses. These might arise as a result of anything from statutory awards and damages, to prosecution or defence costs, public relations expenses, tax liabilities, civil fines and penalties or even disputes between directors. 

The need for cover has never been greater

We’re living in particularly uncertain times, with a shifting regulatory landscape and a growing focus on the need for tighter corporate governance. 

The COVID-19 pandemic, the climate crisis and Brexit have all contributed to an environment where litigation is increasingly common. As a result, the financial risks to company directors and officers from potential legal action are also increasing. 

As with any kind of cover, Directors and Officers Liability insurance is only useful if it meets your specific needs. Always ensure that your cover protects you fully, by talking to one of L Wood’s experts today.  

Call us on 01274 515 747 or email us at mail@lwood.co.uk to find out more.