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D&O insurance: Managing your risk

Imagine you’re the health and safety manager for a business.

Then imagine that, despite following your exact recommendations, a member of staff has an accident that leaves them incapacitated and decides to sue the company.

You might assume that the business will be at risk and have the appropriate insurance cover to protect itself, but there is a chance that the injured party – or even the Health & Safety Executive in this instance – might pursue you for negligence or providing incorrect advice. You’ll potentially be left open to being sued or even imprisoned.

While this hypothetical horror story is extreme, this could happen to anyone with a high level of responsibility within a business. Directors, partners and even managers can personally be at risk for a range of reasons – not just health and safety.

It’s advisable that senior managers take out Directors’ and Officers’ [D&O] Liability Insurance to make sure they are covered.  While it has an old-fashioned name, it’s invaluable in the modern world covering individuals within a business, including directors, partners and other members of staff with authority to represent the company – as opposed to the business itself. D&O Insurance will typically cover the individual, including their defence if the case goes to court.  It helps to protect both them individually and their assets.

Covering all angles

D&O covers liability for actions or omissions (in legal terms known as ‘wrongful acts’) made while acting on behalf of the company. Claims can be brought for a diverse range of reasons, including breach of trust, negligence, defamation, wrongful trading and pollution – even if they were made with the best of intentions. D&O insurance will also protect against some employment claims and if a company pension scheme goes into administration.

An extension to the policy, known as entity cover, is also available. This add-on product will protect the organisation itself and can be useful if a claim is being made against both the company and an individual director.

In conjunction with Alan Boswell Group, appointed insurance broker to AF Group, we aim to talk to our clients to establish their insurance requirements to make accurate recommendations and our discussions tend to be part of a wider conversation about business insurance.

It’s an easy assumption that nothing’s going to happen, and if it does, the company is accountable. That’s not always the case.

It’s always worth speaking to an expert, because there are lots of intricacies that you’ll need to take into consideration.  It’s important to speak to an experienced insurance broker to get advice on the right cover to find out what they recommend, the cover you need and the cost. They should also be able to give you supporting information and literature, so you’re sure you have the right cover.

Call Richard Hastings on 01603 881 874 or email

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