Directors and Officers Insurance

What is Directors and Officers Insurance and why do you need it?

Directors and Officers of a company may be held personally liable to any parties that have an insterest in the running affairs of a company, be that a PLC or a Limited company. Most directors of a company should be aware of directors and officers duties, which are wide ranging and sometimes complex. This aspect alone means there is a great need for a company to obtain Directors and Officers Insurance.

Some areas of exposure are as follows:

• Where directors owe duties as an agent of the company
  They must not act outside their position of powers, must carry out their duties with reasonable skill and must act in good faith in the company's interests.
• Where directors owe duties as fiduciaires of the company
  They must not abuse their position of power over the company for their own interests. For example, they must not deal with the company on their own behalf without declaring their personal interests.
• Where directors are subject to duties imposed by statute
  There are numerous statutory duties of widely differing types. Among the many Acts which impose duties on directors are the Companies Acts of 1985 and 1989 as well as the new Companies Act 2006, the insolvency Act 1986, the Financial Services Atc 1986, the Data Protection Act 1974 and the Health and Safety as Work Act 1974. There are other Acts and also certain European legislation.
• Where directors owe duties on the insolvency of a company
  Directors must in vertain circumstances consider the interests of creditors of the company. Such duties were first imposed in 1986 and represent a revolution in the legal position of a director.
  If a company incurs debts when the directors knew or ought to have concluded that the company would fail, the directors may, if the company subsequently goes into insolvent liquidation, incur personal liability for those debts. This is 'wrongful trading' under the Insolvency Act 1986 (section 214). If found liable for wrongful trading, they may have to pay the company's creditors in full from their own resources; their liability in potentially unlimited.
• Where directors of public companies owe specialised duties
  Directors of public companies are subject to extra duties, for example a duty to esnure that all listings particulars are true and not misleading.

Compare directors and officers insurance policies now

The online Quote and Buy system has been specifically developed to cater for the commercial insurance needs of small and medium sized companies. With our insurers Catlin and W.R Berkley, you can be sure that by using our online system you will be able to find the cover best suited for your business.

We compare the market on your behalf to provide you with the best small business insurance quotes from the UK's leading commercial insurance companies.

If you have any questions, please call us on +44(0)1323 648000