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The What, Why, How and When of Directors and Officers Insurance

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Directors and Officers Insurance is by no means a new concept yet it is surprising how many companies are unaware of what it is and how it can protect their business and their director's own pockets from either real or bogus claimants.

What Is Directors and Officers Insurance?

Also referred to as Management Liability Insurance, Directors and Officers Insurance is a policy that protects company Directors, Officers (and their spouses) assets and income in the event that an individual or company tries to bring a claim against them personally. This could be a former or existing employee, a competitor, supplier, investor; pretty much anyone in the stakeholder spectrum.

Why is Directors and Officers Insurance Important?

The financial crisis heralded a global emphasis on individual accountability and unsurprisingly since then D&O claims have continued to grow in number and severity. With Directorship status comes a significant level of responsibility to your stakeholders; couple this with the general level of risk associated with running a care business and there lies the evidence of the importance of D&O cover. It is also worth noting that becoming a limited company does not protect the assets of your directors and managers being accused of wrong doing.

How Much Directors and Officers Insurance Do I Need?

This depends on a number of factors including the size of your company, the industry / industries in which you operate, your revenue and legal history, to name but a few. We can of course help you determine this. Essentially the customer decides on the limit which normally is a figure that adds a level of comfort before a claim hits the pocket of the directors or the company. Depending on the company this can be as low as £250,000 to many £ millions.

When should I get Directors and Officers Insurance?

It is never too early as claims can come in literally anytime but as a company becomes bigger,  so the exposure ramps up as well as the difficulty for decision makers to keep tabs on all areas. As soon as a business relies on its managers and directors to make decisions on its behalf, then buying D&O is a must.

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