New legislation came in within the Corporate Manslaughter Act in April 2008. The Corporate Manslaughter and Corporate Homicide Act 2007, changes the basis on which companies and staff are liable for prosecution for Manslaughter. For the first time, companies and organisations can be found guilty of corporate manslaughter as a result of serious management failures resulting in a gross breach of a duty of care.
Directors & Officers can be held responsible for discrimination, negligence, health and safety, data protection, fraud, and more, and their personal assets may be at risk.
It protects company directors, other senior executives or managers, officers of charities, boards or committees from certain personal liabilities which they may face on the company’s behalf, incurred as a result of their personal negligence, default, breach of duty or trust.
The insurance pays legal defence costs and where appropriate, claims arising from actions or decisions taken while managing the business and any final settlement or compensation award in actions bought by shareholders, employees, customers, suppliers or anyone else mounting a claim against the directors.
Why you should consider it:
- Regulation is increasing, and this can result in more actions brought against directors of companies
- Shareholders and other third parties are becoming more aware of their rights, and lawyers will act on a no win no fee basis
- It deals with issues not covered by limited liability status, which is not applicable to directors personal assets
- Covers legal costs, expenses and compensation, also expenses where a successful defence is unlikely
Directors and Officers liability insurance policy features can include:
- Defending employment related wrongful acts
- Legal representation
- Claims for damages, judgements or settlements
- Defending actions between directors of the same company
- Tax contributions due after a company has become insolvent and liability ensues
- Extradition proceedings