{"id":4670,"date":"2019-10-02T11:23:13","date_gmt":"2019-10-02T10:23:13","guid":{"rendered":"http:\/\/www.policybee.co.uk\/blog\/?p=4670"},"modified":"2022-08-02T16:17:00","modified_gmt":"2022-08-02T15:17:00","slug":"directors-and-officers-insurance-explained","status":"publish","type":"post","link":"https:\/\/www.policybee.co.uk\/blog\/directors-and-officers-insurance-explained","title":{"rendered":"What is directors’ and officers’ (D&O) insurance?"},"content":{"rendered":"
\n
\"Directors'<\/figure>\n<\/div>\n\n\n

So then, “What is<\/em> directors’ and officers’ insurance?” you ask.<\/p>\n\n\n\n

The short answer is: essential cover if you own or help run a business. Why? Because if something goes wrong and you’re sued, the law says you\u2019re personally liable for the consequences. <\/p>\n\n\n\n

Yes, that’s right – personally<\/strong> liable. As in, you<\/strong> have to pay. Worse still, that same law applies even if you didn’t know there was<\/em> an issue. Ignorance is no excuse, apparently.<\/p>\n\n\n\n

<\/p>\n\n\n\n

What does directors’ and officers’ insurance cover?<\/h2>\n\n\n\n

Directors\u2019 and officers\u2019 insurance<\/a> (D&O) covers the owners, directors and managers of your business, against the risks associated with running it. It\u2019s insurance for bosses, basically.<\/p>\n\n\n\n

If an employee, shareholder, competitor, regulator, or pretty much anyone thinks someone in charge hasn\u2019t exercised \u2018due care\u2019 when running your firm \u2013 in whatever capacity \u2013 they can sue the company and the individual in question.<\/p>\n\n\n\n

Typical claims involve such things as financial mismanagement, breach of company law (the Companies Act 2006 alone contains hundreds of possible areas of non-compliance), health and safety issues, and employment practices problems (really big one, this).<\/p>\n\n\n\n

A D&O policy pays to defend you in court and, if you\u2019re liable for damages, picks up the tab for any awards made to the claimant.<\/p>\n\n\n\n

<\/p>\n\n\n\n

What\u2019s in it for you?<\/h2>\n\n\n\n

In short, everything.<\/p>\n\n\n\n

Most professional insurance deals with claims against the company and policies are designed to protect its reputation and its bottom line. Claims against directors are different because legal action is brought specifically against the individual.<\/p>\n\n\n\n

And, if you\u2019re sued personally, you have to respond personally.<\/p>\n\n\n\n

That means putting your hand in your pocket to defend yourself. Solicitors aren\u2019t exactly cheap and, with unlimited liability<\/strong> thrown in if you\u2019re guilty, worse-case scenario could see you waving goodbye to your savings, your house, your car \u2026<\/p>\n\n\n\n

Gulp.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Do you need directors’ and officers’ insurance?<\/h2>\n\n\n\n

Of all the professional insurance we deal with, directors’ and officers’ insurance could, arguably, be the most valuable. No other cover protects a company and the individuals who run it in quite the same way.<\/p>\n\n\n\n

So it\u2019s a constant puzzle we\u2019re not asked for it as much as we\u2019re asked for, say, professional indemnity insurance<\/a>. That’s maybe because it’s not so well understood. <\/p>\n\n\n\n

Risks associated with the work you do for clients come and go as they do. Risks associated with running a business start from day one and never go away.<\/p>\n\n\n\n

In theory, every business owner or director needs a D&O policy. It should be the first thing on the shopping list. <\/p>\n\n\n\n

For more information call 0345 222 5391<\/strong>, click here<\/a> for a quote or email contactus@policybee.co.uk<\/a><\/p>\n\n\n\n

Image used under license from Shutterstock.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

So then, “What is directors’ and officers’ insurance?” you ask. The short answer is: essential cover if you own or help run a business. Why? Because if something goes wrong and you’re sued, the law says you\u2019re personally liable for … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[159,137,150,140],"class_list":["post-4670","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-directors-and-officers-insurance","tag-insurance-explained","tag-managing-risk","tag-running-a-business"],"acf":[],"yoast_head":"\r\nWhat is directors' and officers' (D&O) insurance?<\/title>\r\n<meta name=\"description\" content=\"Directors' and officers' insurance is a must if you own or help run a business. 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