Directors & Officers Liability Insurance (D&O) is now considered a crucial form of protection for all businesses, and is often a requirement before investors and board members risk their personal assets to serve your company.
Legally, the directors of a company and the company itself are separate entities and so may both be defendants, separately or jointly, in any legal action or prosecution. D&O insurance can help to protect the personal assets of individuals and, crucially, to cover the costs of their defence.
Directors of all companies are now held, at an unprecedented level, to be personally responsible for actions and decisions they make on behalf of the company - putting their personal assets at risk if those decisions are tested in the courts.
How does D&O insurance operate?
The policy reimburses directors and senior managers against wrongful trading claims made against them personally. In addition, Directors and Officers Insurance can also protect the business where the company itself is joined in the action. Cover is also provided for legal fees, professional charges and expenses incurred by an insured person who faces formal investigation by a government body into their affairs or the affairs of their company.
Where do claims come from?
New and Emerging Risks
Directors and officers are bound by complex legislation in the UK, including:
Download: Directors & Officers Liability Insurance
Activism by shareholders, criminal prosecutions, investigations by vigilant regulators and employment disputes are all on the rise, and even non-exec directors are feeling the pressure. It’s not just the blue-chips who need to worry – managers & directors of SMEs are exposed too.
Health & Safety
An employee is involved with a fatal accident at work. The health and safety executive and the heirs to the employee’s estate bring legal action against the company and the directors personally for compensatory damages.
A minority shareholder brought action against the former directors of a property management company after they sold it. He alleged they had failed to obtain fair value for the sale of the company and demanded the directors make good the shortfall.
Two directors were disqualified after actions by the secretary of state when financial irregularities were uncovered when the company went into receivership. The accounts were overstated prior to a public share offering, which led to an inflated share purchase price.
A competitor claims a board member has released misleading statements tarnishing their reputation. They issue legal proceedings against the company and the director individually for libel damages.
An employee accuses a director of inappropriate advances after a business dinner celebrating clinching a large contract. The employee brings the action against the director personally.
A share price plunge follows a profits warning. It is subsequently discovered there were numerous share disposals immediately prior to the announcement – all the directors face an investigation and the external shareholders sue for their losses.
If your company operates overseas, there’s also a raft of further legislation including EU directives and US securities laws. If directors make frequent business trips to the USA, adequate D&O coverage must be in place to provide legal representation & extradition protection should they be detained by US authorities.
D&O Insurance can be bought as part of a portfolio of insurance to keep your costs down.
Quote within 24 hrs
Insurance brokers who understand and work with technology companies are a rare breed, to be highly recommended.
The service we get from La Playa is faultless. You are a pleasure to work with.
Thanks for all of your help with this, you've been incredibly helpful!
I like that you can put together a small package suitable for us as a startup and that this can easily be adapted as our needs develop without breaking the bank on the way
For smart technology insurance, you don't get much smarter.
An innovative leader in providing insurance solutions to technology businesses.
We thought that we had exhausted all options for our type of business. La Playa completely understood the field we operated in and provided us with new options - and then shopped around for us to get a better price.
[La Playa] provided world-class expertise and professional service. [They are] experts in insurance and risk management for the technology sector and managed to provide superior product and service whilst reducing cost.
These guys are the only insurance people I will tolerate speaking to these days, as they are actual humans (with both a brain and a heart!) and offer very good packages too - they answer calls and emails promptly and when I had an issue recently with my bank were very helpful to get it fixed.
We've been putting off our insurance needs for far too long, and I feel we are now in safe hands.
I always appreciate how quickly [you] respond to all our questions.
Thanks as always for your extraordinarily quick response and great customer service.
As always we come away thinking how lucky we are to have found La Playa and the people we deal with there - bet there's not many that can say that about their insurance company!
They are the best insurance company to deal with and our contacts there get 10 out of 10!
Open, friendly and supportive
Thank you so much for giving so generously of your time to contribute at the Ignite Programme - it would not be the success that it is if it were not for the commitment and dedication of contributors such as yourself.
La Playa's specialist Science & Tech team can help you protect your business with smart, flexible, high-performance insurance - with a friendly human UI. We understand the risks and pressures you face - and we speak your language. We’ll support you with great advice - helping you make good decisions for your business.
As a Lloyd's broker, La Playa has solutions for even the most complex risks, and our services also include Business Protection and Employee Benefits. But what does "Boutique Service" actually look like?
Careful listening to really understand your needs and priorities
As much help as you need with completing forms to provide risk information
A discreet and complimentary appraisal* to assess the risks and ensure you have the right coverage where you need it
An independent market review - so you don’t have to shop around comparing policies, cover limits, risks covered and smallprint exclusions
Careful monitoring of the carriers’ financial strength, claims and customer service
An independent recommendation of the best policy for you - and why
Specialist policy wordings from underwriters who have demonstrated excellence and deep understanding of your risk exposures. We have analyzed a wide range of policy wordings and have selected only the best for our panel. Our advisors have a deep working knowledge of these policies
*subject to insurer availability
An intelligently designed portfolio of protection across multiple asset classes, liabilities and territories
Advice on how best to manage your risks - to keep you safe but also to keep insurance costs down
A dedicated advisor so you can speak to the same person each time.
Expert guidance on valuations, security and risk management, and connecting you with specialist advisors and suppliers
Direct phone and email access to your advisor for questions and advice.
Policy documents emailed to you - no logins and passwords to remember
An advocate beside you if you make a claim - thinking laterally to mitigate the impact, making useful connections to get you back up and running, and driving through a swift financial settlement
Tech-based business is 24/7, global and borderless, always exposing you to new risks and liabilities - often in unfamiliar places. As the law struggles to keep pace with technology, insurance can provide a real safety net if you fall foul of changing legislation.