Directors and Officers insurance cover can also be known as Management Liability; it provides financial protection to those who act as directors or officers of an organisation. Policies are designed to cover the cost of claims made against the insured individual.
Being an officer or director brings with it a level of responsibility, including certain responsibilities to employees and members. It exposes the officer/director to personal liability for their actions, or for omissions they make in the performance of their company duties.
Making an error on a seemingly minor decision can put them at risk of compensation claims, legal action or official investigations being directed towards them personally. Even if they have done nothing wrong, the cost of defending such claims can be financially crippling to defend.
Without Management Liability insurance in place, Directors may find themselves personally Liability to pay the costs to defend the claim.
In addition to Trustees Liability, a policy would usually extend to provide coverage for the Charity, Club or Association itself via a Charity, Club or Association Legal Liability section.
Employment Practices Liability can also be added in addition, which provides coverage against claims made by employees alleging, for example; harassment, discrimination, wrongful/unfair dismissal and failure to promote/negligent evaluation.