Risk protection best policy to avoid penalties
Directors assume onerous responsibilities as far as their duties
to creditors, shareholders, clients and customers are
Claims resulting from a wrongful act or more commonly an alleged
wrongful act may arise from many directions, including creditors
suspecting mismanagement, investors who feel they have been misled,
trade association investigations or industry regulatory bodies and
perhaps the liquidator if the company is thought to have traded
Directors involved in public companies may face further
additional potential claims involving concerns arising out of
allegations of insider dealing or misuse of information, while
European law continues to drive a movement away from corporate to
An alleged breach of any of these duties may lead to a claim
being made against the company or the director individually,
whether or not the director is culpable. In the event of a claim
being brought against the director, it is the director's personal
assets at risk. He cannot rely on his company to indemnify him as
this may result in a breach of the Companies Act.
Directors may face hefty fines, possible disqualification or
even imprisonment. Protection for the key decision makers of the
business is available in the form of Directors and Officers
Further protection is also available for employment practices,
pension trustee issues and fraud losses, if required.
When arranging insurance cover, it is important your broker
fully understands your business activities. At MPW, we regularly
advise our clients and arrange tailored cover so to suit their
budget, providing protection for both the company and its
The cost of Directors and Officers Liability insurance has
substantially reduced whilst the risks have increased in recent
years and we recommend such cover for all company directors and
senior management. Can employers and key employees afford not to
have this cover?
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