I am delighted to announce that Herald Insurance have added a new provider for Directors’ and Officers’ insurance.
Why is Directors’ & Officers’ Liability Insurance so important?
Directors and officers are responsible for running the business of the company. If a third party financially suffers as a result of the actions of the directors and officers then they may bring a suit against them.
Unlike a Limited company, directors’ and officers’ personal liability is UNLIMITED.
In addition, directors may not be able to rely on receiving financial assistance from their companies in the event of them being sued in their capacity as directors.
This may be because a company has no funds (directors are often sued when the company is insolvent), or the company may not be permitted by its Articles of Association, or as a result of another legal requirement, to indemnify the directors and officers.
If the directors and officers cannot receive indemnity from the company and have no D&O insurance then they would have to pay the loss settlement and defense costs out of their own pockets.
In today’s world of increasing litigation and additional regulatory pressure on directors and officers it is now more important than ever that consideration is given to purchasing adequate D&O insurance to provide protection against this rising threat of personal legal liability that directors and officers are now facing.
The CNA wording has been developed to meet the needs of directors and officers, offering protection against the often significant personal financial costs that may be incurred. The wording includes the following key coverage:
- coverage for Wrongful Employment Practices claims made against directors and officers
- defense costs incurred as a result of a criminal proceeding for manslaughter brought under the Corporate Manslaughter and Corporate Homicide Act 2007
- six years free extended reporting period for retired directors
- compensation for court attendance
- emergency defense costs (up to 10% of limit)
- in the event of the financial insolvency of the insured company, the policy will remain in force up to expiry of the policy
- prosecution costs incurred to overturn an extradition order