Directors and Officers (D&O) insurance cover dates back to the 1930s when Lloyd’s of London wrote the first D&O policy, which was arranged for a USA client. The development of corporate indemnification in the following decades meant that D&O cover really gained impetus in the 1960s.
The need for D&O cover has grown over the years within an evolving legislative and regulatory framework in most countries such that directors and officers see the cover as a must-have.
D&O primarily provides coverage for individuals against allegations of Wrongful Acts, while acting in their capacity as directors or officers of a company. Wrongful Acts can include breach of duty, breach of trust or negligence. There is often cover for costs incurred in regulatory proceedings too.
The policy is designed to cover the personal liability of the company directors and officers themselves, and also to provide reimbursement to the company if it has had to indemnify a director. The policy also usually provides cover for an individual who is required to attend any official investigation into the affairs of the company. D&O cover is usually purchased and paid for by the company on behalf of the directors and officers.
A D&O policy can extend to include business risks arising from Corporate Legal Liability – often called “Entity” cover – and Employment Practices Liability (EPL) – often called “Management Liability” (ML) when written in combination with D&O and not written as a stand alone product. Over the years, D&O and ML policies have evolved into very complicated contracts with numerous heads of cover and pitfalls for the unwary.
With claims coming from a wide variety of sources, from investors and employees to customers and competitors, it’s vital to protect the individuals’ own assets and the company’s balance sheet.
We arrange D&O and ML for a wide variety of companies, based both UK and worldwide, including publicly quoted and privately held commercial companies, small and large charities, insurance brokers, financial institutions, asset managers and small and large sports clubs (both professional and amateur).
For more information or to talk about your specific needs, please contact us by phone or email.