SME and mid-market companies, and their directors and officers, can be exposed to a greater range of risks than before, and need an insurance solution to respond to this. In this article, Gallagher discuss the industry risk landscape and how Directors’ and Officers’ insurance (D&O) can help organisations to protect themselves from these exposures.
The threat to directors and officers
Decisions you make, whether as a director or an officer of a business, can resurface months or even years later in the shape of a personal claim against you, by employees, the company or a third party. That’s why amongst small to medium-sized technology businesses, the use of Directors’ and Officers’ insurance is increasingly important. Not only can a claim against a director and officer result in expensive legal costs, it can also lead to negative publicity which can be catastrophic for your organisation. Plus, a claim can have an impact on recruiting future candidates, making them less likely to work for your organisation.
Protecting your organisation with D&O insurance
Gallagher offers D&O liability insurance policies, with comprehensive protection within a broad policy wording.
Typically, D&O insurance covers regulatory investigations against individuals, director vs. company or shareholder allegations and criminal actions and investigations made against your organisation’s directors and officers. Harassment allegations are also included, as are cases where management is believed to have accessed personal emails or communications. This is especially vital in light of GDPR, and with more and more personal information being stored on work devices these cases are likely to increase.
Cover also responds to defamation cases, which are often instigated by individuals who feel aggrieved by actions or comments taken against them – ex-employees for example. Contract disputes are another area where D&O can help, especially those stemming from non-performance or non-payment accusations from suppliers or customers.
Finally, D&O insurance covers claims made by creditors in the event that your organisation becomes insolvent following scrutiny of company transactions, accounts and the actions of your directors.
With so many different scenarios for a claim being made against your directors and officers, it can be impossible to adequately anticipate and prevent a claim. Even the most prudent and risk adverse business can find themselves on the receiving end of litigation and in light of GDPR, this could be catastrophic for your business financially. Reputational damage can also be an issue too, sabotaging relationships with suppliers and alienating customers. In short D&O cover can offer a way to arm yourself against legal claims, no matter their origin. Our policy offers broad, tailored coverage and can help you to tackle an issue you’d struggle to handle alone.