A common misconception and question Directors of a start-up or a small company ask us is, does a company really need Directors and Officers insurance? Especially when as it is perceived to be too expensive to consider, on top of all the other company insurance costs. Yes is the answer, we all buy insurance hoping we will never need to use it.
10 reasons why you should consider D&O Cover
- Employment Claims Sadly, we now live is a litigious society, ‘where there is blame there is claim mentality’. A company needs to protect itself, as claims can result in astounding settlements.
- SME’s (Small Medium sized Enterprises) are exposed. In fact, a small operation is far more vulnerable to financial devastation from litigation fees than a larger company with more money and resources is.
- Personal assets at risk. If a Director has been accused of breaching their duty then their personal assets are at risk.
- Regulators are becoming more vigilant. One of the main drivers of claims in the UK has been the increased efforts made by regulatory bodies to investigate and prosecute
- The cost of legal action. There has been an exponential rise in legal costs for defending allegations. Companies or directors could find these run into thousands of pounds.
- Investors could try to sue you. Because investors who lose value in their shares as a result of a Director or company’s alleged misconduct, may pursue court action for compensation.
- Protection against insolvency or bankruptcy. If a Director or company becomes insolvent or bankrupt and a creditor feels that, they have not acted in their best interest they may take up legal action. Another cost to factor in.
- Do not assume that D&O insurance is covered by other liability policies. A common misunderstanding by other Directors or companies is that this is covered by other liability policies such as Professional Indemnity
- D&O insurance is affordable. The cost per annum is affordable when you consider a claim could run into hundreds of thousands of pounds, it is worthwhile.
- An advantage when it comes to attracting individuals to join your company, knowing they will be protected.
To discuss Directors and Officers insurance or any other insurance needs you may have please contact us 01242 544 544 or via the web http://ratcliffes.co.uk/contact/