Directors and Officers Insurance

(definition) – Protecting directors and officers, including other employees acting in a managerial capacity, in the event that they are sued personally in conjuction with the performance of their duties. This includes negligence and failing to act in the company’s or to exercise reasonable business judgement

Here are some examples:

Let me showcase a couple of examples of claims we have dealt with. 

Firstly, following damage to a residential block of flats, the insurance purchased by the directors was found to be inadequate to cover the loss. Consequently, the property’s shareholders – the leaseholders and residents – have notified that they may bring an action against the directors/freeholders for negligence.

Secondly, the directors of a property management company brought an action against a resident for non-payment of a service charge. However, the resident issued a counterclaim against the directors for incorrectly calculating his service charge. Fortunately, the directors could defend their position robustly, knowing they had the benefit of this policy behind them. If found negligent, the directors would be liable for the uninsured loss.

Lastly, an employee on a building site falls through a ceiling and lands on a concrete floor 10 feet below. Although injured, the Health & Safety Executive attended the scheme and cautioned the Directors before explaining that they could be personally held liable for the accident despite having Employer’s Liability Insurance. Due to changes in legislation, directors are now personally liable if, through their acts of error, injuries and death on site can be pursued against them as individuals. This applies to the director and all employees in a managerial or supervisory capacity. This applies to the director and all employees in a managerial or supervisory capacity.