Whether it’s a somewhat claim made by a disgruntled customer or an official investigation made by a regulatory body, individuals at the top can find themselves facing legal action for a whole host of reasons. If you’re director or officer and a court finds you to be personally liable for a claim of wrongdoing, it’s your responsibility to pay for the legal proceedings and compensation payouts – not that of your company. If you don’t have insurance in place, or the funds to foot your legal bills, your personal assets are at risk – meaning you could lose your savings, your car or even your house.
Even the most straightforward investigations of failure to comply with regulations can run up a bill in the tens or hundreds of thousands. Directors’ and officers’ liability insurance, abbreviated to D&O insurance and sometimes known as management liability insurance, is designed to protect directors and officers against the costs of claims of wrongdoing in their managerial capacity in their company. To avoid a potentially bankrupting lawsuit, D&O insurance should be a consideration for any director.
Many commercial insurance providers offer a directors’ and officers’ liability policy. It’s one of the more complex products on the market, as directors and officers hold hugely varying levels of responsibility within their companies. Additionally, different industries and business types have a higher exposure to D&O claims. It’s therefore essential that you seek professional advice when taking out a policy, or consider going through a broker who can advise you on an appropriate level of cover.
Finding the Right Policy & Provider
Directors’ and officers’ liability insurance is a complex product. Determining an individual’s level of risk to D&O claims depends on a multitude of interplaying factors, and no two directors risk is the same. For this reason, it’s a good idea to seek professional advice before purchasing a policy, no matter where you buy.
- Approaching insurers directly – A simple way to find a D&O insurance product is to seek out quotes directly from insurance providers. Many commercial insurance providers offer directors’ and officers’ liability insurance and may be able to provide a quote online. It’s critical not to judge a policy at face value by the price of the premiums, as a cheaper policy may not offer the level of indemnity suitable for you. It’s a good idea to speak with an adviser for a more accurate quote. Indeed, many insurers insist that you seek expert advice from a third-party source before taking out a policy.
- Going through a broker – Brokers are particularly helpful for complex insurance products, where a policy covers multiple people, peculiar events or needs to accommodate for bespoke requests. D&O insurance is one of these. Brokers can advise clients on their level of risk and an appropriate level of cover to choose. They also have access to a large portion of the market and can use their expert knowledge and experience to compare products, finding you the most appropriate solution.
- Comparison websites – A helpful way to evaluate the pros and cons of multiple policies and providers is to use a comparison website. Such sites can summarise the features of various products on the market, highlighting policy benefits and offering quotes from numerous providers in one place. Many of these platforms give the option to filter or order search results according to multiple variables, such as price or level of coverage. You can use a typical comparison website to find a deal, or seek out specialist business websites to compare products.
D&O Insurance Providers
This list compiles some of the insurance providers on the market, offering directors’ and officers’ liability insurance products.
Hiscox
Directors’ and officers’ insurance from Hiscox can offer cover against claims made by investors, shareholders, employees and financial regulators, as well as competitors for defamation. They can pay out for legal defence costs as well as any settlement amounts for legal or criminal actions, with indemnity limits of £100,000 to £10 million available. Hiscox is an experienced commercial insurance provider, with a rating of 4.7 out of 5 on Feefo according to almost 3,000 reviews. D&O insurance from Hiscox is only available through a broker.
Towergate
Towergate offers comprehensive directors’ and officers’ liability insurance. In addition to legal defence costs for a variety of claims, their policy comes with ten years’ run-off cover, protecting directors and officers into their retirement. There’s also no excess to pay if a claim against a manager is successfully defended. Towergate also offers the option to combine D&O insurance into a packaged management portfolio together with employment practice liability and corporate legal cover. Clients can access a quote online or speak with a specialist adviser over the phone.
AXA
Public companies of any size, mid-to-large private corporations and mid-to-large non-profits can take out a directors’ and officers’ liability insurance product with AXA. Their flexible approach allows clients to build a policy according to their bespoke needs and unique coverage requirements. AXA is a global company, and as such, they can write global programmes to protect senior members of companies which operate in multiple countries around the world. Policyholders will benefit from a market-leading claims team who are on hand to offer expert advice and guidance following a claim.
Travellers
A broad-ranging, flexible policy for directors and officers is available from Travellers. They can offer insurance products to companies in over 125 countries. Their policy can cover individuals in managerial positions as well as providing company reimbursement, should the business provide indemnity. They can cover the pre-investigation costs, court attendance costs, extradition proceedings and investigations by HSE or the police, as well as outside entity directorship cover as an additional feature.
Travellers offer a limit of up to £5 million for companies with an annual turnover of up to £250 million. D&O insurance from Travellers comes as part of a Management Liability package, which can include employment practices liability, crime insurance and pension trustees liability insurance. D&O insurance by Travellers is only available through a broker.
AIG
One of the global market leaders in D&O insurance is AIG, having handled more claims against directors than any other company. They have multiple D&O insurance products available for managers of various types of company, including a tailored product for private companies, not-for-profits, partnerships and insurance brokers as well as a product aimed at financial institutions. Their cover is suitable for mid to large-sized enterprises across all industries with turnovers up to £250 million and includes a six-year run-off for retired directors.
PolicyBee
A specialist professional insurance provider is PolicyBee, who received the Platinum Trusted Service Award by Feefo in 2020 for their excellent service. PolicyBee aims to provide a quick, hassle-free service using straightforward terminology for ultimate transparency. Their D&O policy comes with a team of in-house legal experts to help with queries and a line of action when a claim occurs. Any business with an annual turnover of up to £2 million can generate a quick and easy quote online in just a few minutes, or you can call them for a quote.
Aviva
Directors’ and officers’ liability insurance is available through Aviva in a combined package product known as management liability, which includes employment practices liability and corporate legal liability. Their policies can cater to private companies, public companies and not-for-profit organisations, no matter the size or industry.
The D&O cover in their policy includes cover for outside directorship as well as retired directors, with a discovery period of six years. Other policy perks include crisis event management to limit reputational damage through bad press, as well a legal assistance helpline. Aviva’s D&O insurance is only available through brokers.
Allianz
One of the more extensive products on the market is D&O insurance from Allianz, which has the capacity to cover businesses with a turnover of up to £200 million. Not only does it offer personal liability to directors, officers and managers, but it can also protect companies if claims are made against the business itself. Perks of the policy include a free employment practice helpline for advice and support to deescalate situations before they turn into allegations, as well as a dedicated claims-handling team.
Directors and officers liability and company reimbursement are available up to £10 million, and cover of up to £250,000 is available for a non-executive director. The policy also includes up to £5 million in company entity liability as well as financial loss incurred by employee dishonesty up to £75,000. D&O insurance by Allianz is only available through intermediaries.
Clarke Williams Insurance (Broker)
Based in Kent, Clarke Williams Insurance have over 50 years’ experience providing commercial insurance solutions in the UK and Europe. Their D&O insurance can cover businesses in a wide range of industries, including those in accountancy, recruitment, construction, manufacturing, technology, engineering and finance, to name a few. Clarke Williams advises taking out D&O insurance in conjunction with a professional indemnity insurance policy. For a personalised quote, they’re available over the phone.
Clegg Gifford & Co
Directors’ and officers’ liability insurance through Clegg Gifford & Co is available to purchase online, underwritten by Lloyd’s insurers. Customers can choose an indemnity level anywhere between £100,000 and £5 million, making their cover suitable for start ups up to large corporations. They can also offer discounts to any directors who take out multiple policies with them, or for those who sit on numerous directors’ boards. Businesses who operate in both the UK market and abroad have access to the Lloyd’s market to arrange international coverage. You can obtain a quote over the phone.
Get Indemnity (Broker)
Get Indemnity is a specialised D&O insurance broker, having access to a range of directors’ and officers’ liability solutions across the wholesale market. A variety of products are available for businesses with up to £100 million in turnover. They can also help companies who have been trading for less than two years, or those with a negative net worth if they can provide additional information such as a business plan, financial projections or evidence of additional capital.
Both standalone D&O cover is available as well as a packaged management liability insurance product, featuring D&O insurance with the option to include employment practice liability, corporate legal liability, crime insurance or additional cover. To obtain a quote, you can fill in their online application form and receive a quote within 48 hours.
Arkwright Insurance (Broker)
A D&O policy through Arkwright is tailored to private companies, able to protect limited liability companies as well as not-for-profit business directors. Arkwright offers a personal service, working with you to find a bespoke insurance solution suitable for your company through its panel of specialist providers. Features of their policies include full insurance and protection for the director’s home and assets, and cover for claims against unpaid taxes, negligence, unfair dismissal and health and safety. Policyholders benefit from a 24-hour emergency helpline, available all year round. Quotes are available online or over the phone.
Aston Lark
Directors’ and officers’ liability comes as a pairing with company liability from Aston Lark, who can also offer employment practices liability. Other possible policy extensions include cover for the business, outside directorship liability and investigation cover. Aston Lark offers a hands-on approach, helping companies develop effective risk management. This includes access to advice and guidance on disaster recovery and business continuity planning as part of a policy. Companies can request a quote online by filling in the enquiry form for a response with 24 hours or phone them to arrange cover with an adviser.
CFC
Directors’ and officers’ liability is available in a comprehensive management liability product by CFC. Their policy includes cover for directors sitting on the boards of outside entities, as well as an additional limit for non-executive directors. Entity cover is also available, together with employment practices liability and a range of other add-ons, including reputation protection, cyber and privacy cover, kidnap and ransom and benefit plan liability. CFC can protect businesses of all sizes and include claims made anywhere in the world as a standard feature of their D&O policy. To obtain a quote, you can fill out the application form available on their website.
Zurich
A leading global insurer, Zurich offers a D&O insurance product which can provide international coverage, ideal for any companies operating in multiple markets. Their comprehensive policy covers both directors and the company against their exposure to D&O risk, with coverage available for traditional D&O claims as well as newly emerging threats, such as environmental protection, cyber security, social engineering theft and fraud as well as climate nondisclosure.
Zurich is highly rated based on its financial strength and stability, as well as an award-winning claims service. Policyholders also benefit from a pre-claims advisory service to mitigate the threat of a claim before it occurs. You can get in touch for a personalised quote through their website.
Markel Direct
With over 25 years’ experience providing commercial insurance, Markel Direct offer specialist cover for directors’ and officers’ liability. For companies after a comprehensive package deal, they can offer D&O liability together with entity defence and employment law protection under their management risks combined insurance product, as well as D&O insurance in isolation. Markel UK was rated the Top UK Commercial Lines Insurer in the Insurance Times five-star rating report 2019/20, owing to its five-star rating across all lines of service.
As part of the packaged product, directors, officers, trustees and the business itself have protection against claims of non-compliance, breach of contract and a range of other business activities. On top of this, Markel offers a PR crisis management service to minimise unwanted media attention associated with a claim. An expert advice helpline is also available for any employment law queries. Businesses can access Markel’s insurance products through a broker.
Anchorman Insurance
Offering competitive premiums for their D&O insurance, Anchorman Insurance offers both in-house schemes and insurance deals from their trusted panel of partner insurers. Directors’ and officers’ liability is one of three elements to their management liability insurance policy, alongside corporate entity liability and employment protection liability, offering maximum coverage to a business and its management staff. Insurance solutions can be arranged via consultation with one of their expert advisers, which you can book online or over the phone.
Summary
As we’ve seen, D&O cover is designed to protect the directors and officers of a company against claims of wrongdoing where they are found personally liable, and must therefore foot the costs of the legal proceedings themselves, even when the decision in question was taken within their capacity within the company.
D&O cover, therefore, serves to protect directors’ and officers’ personal assets and can also reimburse companies that volunteer to cover these costs on behalf of their managers. As with all insurance policies the detail is key in selecting the right policy for you, always do your research and seek professional advice when finding a D&O provider and policy that fits your business.
