9 Questions To Ask Yourself
Before considering D&O insurance, you may wish to evaluate the likelihood and potential damage resulting in a claim. For example:
- 1. Who will be sued?
- 2. Why might they be sued?
- 3. Who will sue them?
- 4. What are the risks?
- 5. How likely is a lawsuit?
- 6. How much can lawsuits cost?
- 7. What is the possibility that the company is sued rather than its Directors?
- 8. Does existing insurance cover these types of claim?
- 9. How does D&O cover protect you?
Directors & Officers
Essential protection for you and your business
Your business probably has insurance cover in place for a wide range of eventualities, however it is likely that this does not include Directors and Officers liability insurance (D&O).
To protect your company and your livelihood you should put this important insurance in place now. It will provide you with protection and peace-of-mind against personal financial loss associated with claims of negligence or breach of responsibilities. This is vital, as legal actions can be brought from a wide range of parties including shareholders, creditors, employees, contractors, regulatory authorities and the company itself.
SME's At Risk Of Legal Action
Even if you work for a small or medium sized business you still need D&O cover. In fact, it is often considered easier to instigate legal action against smaller businesses, as larger organisations often have more people involved in decision-making, making legal action more complicated.
Despite this, research suggests that only around 20% of SME's consider D&O cover.
The two main reasons for this are:
- Misunderstanding
- The belief that well run companies do not get sued
Reasons For D&O Cover
There are, however, some very important reasons for having D&O cover in place.
For example:
- Even though a company's liability is limited, a Director's liability isn't, so you personally could lose everything
- Directors can be disqualified for up to 15 years or more
- A company may be prohibited from indemnifying its Directors and Officers
- D&O cover can cost a relatively small amount for a great deal of cover
Low Minimum Premiums
At Lockyer our minimum premiums are lower than those of many brokers, starting at just £150+ IPT per annum.
