Directors and Officers Insurance, commonly referred to as D&O Insurance or Management Liability, is a type of liability insurance that provides financial protection for directors, officers, and other key executives of a company or organization. It is designed to cover the costs associated with legal claims and lawsuits brought against these individuals in their capacity as corporate leaders.

Directors and officers can face personal liability for their decisions and actions taken on behalf of the company. This exposure arises from various sources, such as:

• Breach of duty: If directors and officers fail to act in the best interests of the company, shareholders, or stakeholders, they may be held personally responsible for losses incurred.

• Mismanagement: Allegations of mismanagement, negligence, or errors in judgment can lead to legal actions against directors and officers.

• Regulatory violations: Non-compliance with laws and regulations can result in investigations and legal proceedings against individual directors and officers.

• Shareholder lawsuits: Shareholders may sue directors and officers if they believe their actions have negatively affected the company’s value or share price.

Directors and Officers Insurance typically covers the costs of legal defense, settlements, judgments, and other expenses related to these claims. This type of insurance is essential in attracting and retaining qualified individuals to serve on a company’s board or in executive roles, as it provides them with an additional layer of protection against personal financial losses.

Directors & Officers Insurance (D&O Insurance) in the UK typically includes coverage for the legal liabilities and financial losses that directors and officers may face while carrying out their duties on behalf of the company. The policy generally covers the following aspects:

• Legal defense costs: D&O Insurance covers the legal expenses incurred by directors and officers in defending themselves against claims or lawsuits brought against them. This includes the costs of hiring lawyers, expert witnesses, and other related legal fees.

• Settlements and judgments: The policy provides coverage for settlements and court-awarded judgments resulting from covered claims. If a director or officer is found liable for damages, the insurance will help cover the financial consequences up to the policy’s limit.

• Regulatory investigations: D&O Insurance can extend to cover the costs of defending directors and officers in government or regulatory investigations related to their corporate duties.

• Company reimbursement: In some cases, the policy may include a provision for the company to reimburse directors and officers for legal expenses they have incurred on the company’s behalf.

• Employment practices liability: This component of D&O Insurance covers claims related to wrongful termination, discrimination, harassment, or other employment-related issues brought against directors and officers.

• Entity coverage: The policy may offer coverage for the company itself (the entity coverage) if it is named in a lawsuit alongside the directors and officers.

• Outside directorship coverage: D&O Insurance can also extend to cover directors and officers acting on the board of other companies, subject to policy terms.

• Civil and criminal actions: The policy may provide coverage for both civil and criminal actions, but typically excludes coverage for intentionally illegal or fraudulent acts.

At RS Insurance we understand the personal financial risks faced by directors and officers and the importance of directors and officers liability insurance. Your liability is unlimited, and even unfounded allegations against you need to be investigated and defended – costing you money. That’s why we work with the UKs largest insurers to bring you flexible covers and protection.

We give you the best of both worlds – our personal touch and market expertise, combined with great products from the market leading insurers.

Simply get in touch – Depending on the size and complexity of your business the information we require varies in every case.

Feel free to email or call and one of our commercial team will be on hand to assist.

Alternatively you can complete the contact form (with our contact information below). Here you can specify your requirements, a preferred time & contact type – we will receive this in the office and one our advisors will be in touch as requested.