With modern business becoming ever more complex, there’s extra pressure on companies and their leaders to get things right. Chief officers are exposed to a high number of risks when it comes to making sure that their enterprise stays healthy and solvent, but what happens when those same leaders make mistakes that damage your company?
This is where Directors and Officers Liability Insurance comes in.
What does it do?
It’s an insurance product that covers your company or business in the event that a director or officer is sued for alleged or actual wrongdoing during their time in management. It covers potential damages and defence costs as a result of actions they carried out on the company’s behalf.
When might I need it?
The list of potential claims that could be brought against directors or officers is lengthy, but typical scenarios include:
- Failing to comply with regulations and laws
- HR issues and employment practices
- Making decisions without appropriate authorisation
- Poor governance
- Poor performance of your company
- Violation of fiduciary duties
With directors and officers facing an increasing number of risks in their roles, and extra scrutiny placed on their ability to keep the business that they run operating smoothly, protecting yourself against alleged and actual faults is key. Investors and employees are more aware of their rights and have greater understanding of their legal recourses should a director or officer act improperly, making them more accountable than ever.
Does my business need it?
You could be forgiven for assuming that an insurance product such as Directors and Officers Liability would be geared towards bigger companies and businesses, but the reality is that even small and medium companies have a need to protect themselves against mistakes made by those in charge of your operations.
Whatever the size of your business, errors made by your chief officers and directors can have a significant financial impact, making Directors and Officers Liability a cover you should seriously consider.
To find out more about Directors and Officers Liability, click here to speak to our advisers today.