Directors, Officers and Entity insurance you can trust
Directors, Officers and Entity Insurance
It seems that today if anything goes wrong or anything happens it is expected that blame will be apportioned ‘It must be someone’s fault!’ The reaction to this tends to be ‘sue’ and with the many businesses offering to help it is fairly indiscriminate with regard to who is the object of the litigation.
So often it is a limited company that people think can be blamed – sue the company or sue the directors of the company.
If the case is against the named directors then D & O cover can step in. If it is against the company then Entity cover is what is required. Many insurers put the two together in the current market but D & O can be insured without the Entity cover if necessary. It is very rare to seek Entity cover without D & O.
D & O covers the negligence of one or more of the directors or officers of a company or one of them exceeding their authority.
For example if a director advises one firm that a contract has been awarded to that firm, thinking that he/she was right to do so. However, if it was subsequently found that the contract was later awarded to another firm because the bid from the second firm was more competitive but was not awarded the contract for some months. The director who advised the first firm could be liable for, at least, the difference if the first firm went ahead with the contract.