If you can keep your head when all about you are losing theirs and blaming it on you. If you can trust yourself when the board doubt you but make allowance for their doubting too. If you can bear to hear the truth you ve spoken twisted by human resources to make a trap for fools. If you can fill the unforgiving meeting with sixty seconds worth of strategic planning, you ll be a director my son! Personal Directors and Officers Liability Insurance
Personal Directors and Officers Liability Insurance You are a director, financial director or a non-executive director in a private limited company. You are in a position of authority, you are accountable and therefore personally exposed. This scheme is aimed at those directors, officers and non-executive directors who see the benefit of buying individual cover privately to protect themselves. Directors & Officers Liability Insurance protecting the whole of the firm can sometimes be prohibitively expensive, the owner or the board may have overlooked the need for it, or be unwilling to buy it. This is an insurance cover available to you personally to protect you personally at a very attractive premium. You think you would be entitled to expect protection working under a limited company status, however with a continuing trend towards a blame culture, where finding someone personally responsible is increasingly usual in the event of a problem, costly law suits and awards are becoming more commonplace. Directors & Officers Liability Insurance was at one time considered only essential for large public corporations and claims were rare against directors. See claims examples attached on the adjacent pages on how, as a director or non-executive director of a private limited company, you can become accountable. With an increase in the litigious nature of society in general there has been an increase in claims made against directors, some of which now have an increasingly firm foundation in law and others may have no foundation but be costly and an enormous distraction. You also might be worried with the direction the firm is heading in or new strategies that are being adopted that you don t agree with or have any control over. Either way you are personally exposed whether you hold equity or not, and the exposure costs even if your actions have caused no loss.
Directors & Officers are seen as agents for the company and therefore liable for losses the company incurs as a result of errors of judgement or action. Directors and Officers have many obligations both in common law and in statute. Claims can now be brought about by any party that has an interest in the affairs of a company. If a shareholder or third party has lost out as a result of your actions as Director or Officer you could be Accountable. Our premiums start from only 105 per year for holding between 1 and 3 directorships, this offers excellent value for money for that essential peace of mind necessary for modern business life. Directors and Officers Claims Scenarios In all these situations one main theme is painfully obvious you cannot hide behind your Employers limited status. Health & Safety Breaches of HSE regulation may result in costly and time consuming investigations. In one instance nearly 900,000 was spent defending a Managing Director and several Managers as they faced a criminal prosecution for negligence and failure to provide a safe working environment. Non-Executive Directors Non-Executive Directors can also be held liable. This was clearly highlighted in a case where a full-time director defrauded the company and non-executives were found to be negligent. The negligence was due to insufficient attention being paid to the operation of the firm. The claim was settled for an undisclosed sum and was paid out of the non-executives personal assets. This clearly illustrates that non-executive directors in the UK are principally involved to ensure that there is a second pair of eyes on the company s executive management. Non-executives are often exposed to liability just as much as their executive counterparts, which is not something they always recognise.
Negligence Example 1 Two directors were held liable for payments made to another director. The payments took place shortly before the company went into liquidation. It was successfully argued by the firm s creditors that they should take precedence over the director and an award of 800,000 was made. Directors have a fiduciary duty to take the correct course of action. It is also an established part of the UK legislative framework that directors should not profit from their position. Example 2 A financial director was asked by the Board to exercise a break clause on a property surplus to requirements. He failed to carry out the instruction properly leaving the property on continued rent for a further 5 years. Initial reserve 400,000. Example 3 Defence costs totalling approximately 16,000 were paid after a director was held responsible for allegedly failing to arrange death-in-service insurance coverage. Defamation Directors can often be sued for comments concerning competitors, as one director found to his cost recently. His comments regarding one of his company s key suppliers cost insurers 32,000 before the case was dropped by the claimant.
Full retrospective cover Libel and slander cover Key Features Cover for punitive and exemplary damages Cover for wrongful acts in mergers and acquisitions Individual Directors & Officers Premium Matrix All Premiums are inclusive of Insurance Premium Tax NUMBER OF DIRECTORSHIPS Premium for 100,000 Limit Premium for 250,000 Limit Premium for 500,000 Limit 1 3 105 131.25 183.75 4 6 157.50 183.75 236.25 7 9 204.75 236.25 288.75
ACCOUNTABLE PROPOSAL FORM Individual Directors and Officers Liability Insurance Policy Section 1: Details of Proposer Name of Proposer (Individual): Address: Email address: Postcode: Telephone contact: Section 2: Directorships (including Non-Executive Directorships) Company Name Company Registered Address Business Activities of Company Proposer's Shareholding (if any) (use separate sheet if necessary) Section 3: Previous / Current Insurance Do any of the above listed Companies have Directors and Officers Liability Insurance currently in force? Yes: No: If the answer is YES please state (use seperate sheet if necessary): Which Company: Insurer: Indemnity Limit: Expiry Date: Have any of the Companies ever had any Insurer decline a proposal or cancel or refuse a Directors and Officers Liability Insurance? Yes: No: If the answer is YES please provide details below (use seperate sheet if necessary):
Section 4: History of the Company / Companies During the last 3 years have any of the companies: Changed name? Yes: No: Been involved in any acquisitions or mergers? Yes: No: Sold or ceased trading with any subsidiary company? Yes: No: Changed the capital structure of the company? Yes: No: If the answer is YES to any of the above questions, please provide details below (use separate sheet if necessary): Section 5: Claims Information / Circumstances Has there been or is there now pending any claims against the individual or the Company? Yes: No: If the answer is YES please provide details below (use separate sheet if necessary): Is the Proposer aware, after enquiry, of any circumstance or incident, which may give rise to a claim against the Individual or Company in such capacity? If the answer is YES please provide details below (use separate sheet if necessary): Yes: No: Section 6: Indemnity Limit Please select the amount of Indemnity required: 100,000 250,000 500,000 1,000,000 Section 7: Declaration SIGNING THIS PROPOSAL FORM DOES NOT BIND THE PROPOSER OR THE INSURER TO COMPLETE THIS INSURANCE I declare that the statement and particulars in this Proposal form are true and that no material facts have been misstated or suppressed after enquiry. I agree that should any of the information given by us alter between the date of this Proposal and the inception date of the insurance to which this proposal relates, I will give immediate notice thereof. I agree that this Proposal, together with any other information supplied by us shall form the basis of any contract of insurance effected thereon. Signature: Date: Name: Caunce O'Hara & Co Ltd and DUAL Corporate Risks Ltd recommend that you keep a record of all information supplied for the purpose of entering into an insurance contract (including copies of this Proposal Form and correspondence). Caunce O'Hara & Co Ltd and DUAL Corporate Risks Ltd are authorised and regulated by the Financial Services Authority.
Caunce O Hara & Company Limited is an independently owned insurance brokerage. It was established in 1995 and now ranks within the top 100 brokers in the UK. We have offices in Manchester and Leeds, delivering innovative lateral solutions to our clients insurance programmes. Our main activity is arranging corporate insurance programmes but we also write specialist insurance schemes for Liability, Professional Indemnity and Directors & Officers Liability Insurance classes. We are keen on providing the best in customer service and believe our administration and claim paying systems are fast, efficient and reliable. For more information call Chris Caunce, Director, Caunce O Hara or Tim Bell LLB (Hons), Caunce O Hara Tel: 0161 833 2100 Fax: 0161 839 2100 website: www.caunceohara.co.uk email: info@caunceohara.co.uk Caunce O Hara will place your business through underwriting agency, Dual Corporate Risks. Cover is effected with Insurers Arch Insurance Company (Europe) Limited, subsidiary of Arch Capital Group Limited. Arch Insurance Company (Europe) Limited has provided Dual Corporate Risks Limited an exclusive rolling underwriting contract to accept business on their behalf. Dual Corporate Risks and Arch Insurance Company (Europe) Limited are regulated by the FSA. Both Standard & Poor s and A.M. Best have assigned Arch Insurance Company (Europe) Limited A-(Excellent) Financial Strength. Details of Arch Capital Group Limited can be found at their website www.archcapgroup.com Authorised and Regulated by Member of the British the Financial Insurance Services Caunce O Hara & Company Limited, Brokers Authority Association B I B A City Wharf, New Bailey Street, Manchester M3 5ER