Small and mighty – the Directors and Officers Insurance that could save your business

Working on the frontline, directors of SMEs have their fingers on the pulse of their business, knowing its turnover, future prospects and key third party ties. What they may not be so familiar with, without the benefit of the kind of legal expertise a larger company may have access too, is their liabilities, not as a company, but as an individual.

A shift in claims

Historically, leaders have been able to hide behind their companies in the wake of controversy, but in a trend that sees claimants wanting to hold individuals accountable for the actions of their organisation, this is no longer the case.

Health and safety, discrimination, harassment – all these occurrences which would have in the past been automatically attributed to the company as a whole, could now be directly pinned on the person in charge, whether they had direct involvement or not.

This transition means that Directors and Officers Insurance has become more of a necessity even for the smallest of business outfits.

The financial implications

A claim against a Director can be an unwelcome, expensive distraction for a small business which has precious little time or resources which otherwise need to be spent on its operations.

Directors and Officers Insurance can not only provide financial support to defend against legal action or come to a settlement outside the courtroom or tribunal, but with the right insurance provider and broker, also offer much needed guidance at a stressful time.

Talk isn’t cheap  

Below is an example of a claim settled by Zurich, which shows how an error of judgement can easily cost thousands:

“An allegation of slander was made by a customer against an officer of a company. Allegedly comments were made by the manager in public, which supposedly damaged the reputation of the customer. A threat to take the manager to court was made unless a settlement was forthcoming, which was negotiated at £26,500 and covered under the D&O policy.”

Think of yourself

A Directors and Officers Insurance policy is going to protect you as a company director, and your own personal assets. Think of the policy not just as another expense to add to the list of insurances, but as an essential safety net which is going to allow you to do the very best in the role of your organisation.

Talk to our advisers at C&M to find out more about Directors and Officers Insurance and how it can work within your budget.