As a business owner you may be questioning whether the continued value of Directors and Officers Insurance is needed especially if business is still slow following the recession:
A local Husband and Wife team equally owned a highly successful contract cleaning company. Everything in the garden was rosy, until the couple fell out and following a messy divorce; the suspicious wife accused her husband of deliberately mismanaging the company finances to distort the true worth of the business.
This is commonly known as a Director vs Director action and is on the increase as business pressures mount in today’s uncertain times. On this occasion the total defence costs amounted to £75,000 and were recovered under the Directors and Officers Insurance policy.
Directors, officers and senior managers of businesses can be held responsible for a number of issues including:
· health and safety
· data protection
· maintaining satisfactory accounts
· fraud
· negligence
If your business' directors or officers are found to have acted wrongfully and this gives rise to a claim, then compensation and legal fees will be covered by directors' and officers' liability insurance. However, if the act was deliberate it may not be covered by the policy.
