Insurance Myth: It is unlikely that anyone will bring a claim against the directors and officers of small or medium size companies, so they do not need to worry about management liability insurance.
Insurance Fact: The frequency of director and officer liability exposures, and the amount of damage awards are rapidly increasing, leaving no companies safe from claims. Directors’ and officers’ (D&O) insurance claims in the UK have increased more than 300% since the financial crisis, according to new research*.
Types of Management Liability insurance claims
The following parties can make claims against any company, regardless of its size:
Outsiders: Third-party claims made by persons other than the company, its employees, or shareholders, account for many of the reported directors’ and officers’ claims. Competitors, creditors, regulatory agencies, and any other person dealing with or affected by corporate conduct can assert third party claims.
Employees: Employment-related claims against officers are an explosive area of potential liability. The two most common types of claims are wrongful discharge and discrimination. In these cases, employers and directors or officers judged to have contributed to the alleged wrongful conduct can be found liable.
Companies: A claim by a company against itself must be approved by management and therefore is likely to be made against former directors and officers. This type of claim is particularly likely in the aftermath of a takeover, or when there has been a falling out between the company and one of its directors or officers.
Shareholders: Lawsuit by shareholders against directors and officers may seek to recover not only the direct damage incurred by the claimant shareholder, but if certified as a class action, may seek recovery for all similarly situated shareholders who do not directly participate in the lawsuit.
We Are Here to Help
We have some very competitive premiums available for Management Liability Insurance which includes Directors & Officers Liability Insurance from a large panel of Insurers as well as our exclusive in-house scheme.
How do I obtain a quotation?
Getting a quotation could not be easier. Either telephone us on 01837 55777 and we will go through this with you. Alternatively, complete the quote request form and we will call you back.
*Source: Insurance Day