0161 304 5000

January 9, 2023

Heightened risk make D&O insurance an increasingly vital cover

`Business insurance renewal

Economic uncertainty, increasingly aggressive regulatory regimes and the growing impact of Environmental, Social and Governance (ESG) issues mean executives are facing both new and heightened risks.

But they can protect themselves with Directors & Officers Liability insurance reports RBIG Broking Director Geoff Gregory.

A confluence of factors, whilst not quite a perfect storm, do mean that UK executives potentially face greater legal and financial risks.

High inflation, supply chain disruptions, rising corporate insolvencies, a culture of "exploitative" late payment and increasing cyber risks, sit among wider economic volatility to create a new risk landscape.

It's a scenario that's made Directors & Officers cover more relevant than ever. Equally, though, it's ensure that the market for D&O insurance has hardened: securing the right policy at an attractive premium requires experience and expertise.

That's where a business insurance broker of pedigree comes in. It's an area in which we've offered specialist advice and leveraged our close relationships with the leading liability insurers for decades. We're here to help better protect you and, by extension, your business.

But let's start at the beginning...

What is D & O insurance?

Directors & Officers insurance protects directors, key managers and officers against compensation claims made against them for alleged wrongful acts.

Such acts can embrace breach of a wide range of laws and regulations.

Directors & Officers insurance

This could be falling foul of the the extensive health and safety legislative framework, through data and privacy, defamation, negligence, wrongful trading and the increasingly hot potato of environmental regulation.

You can face claims from a number of quarters. A customer, employee, investor, regulator, shareholder or investor could all initiate legal action.

D&O insurance can cover the cost of defending claims and legal actions, including civil proceedings, criminal prosecutions and applications for company director disqualification

Importantly, it can also cover any compensation due when a claim is lost.

Existing, Growing & New Risks

In our new Directors & Officers Liability Insurance guide, we detail a range of existing, growing and emerging executive risks to which D&O insurance can afford protection.

Among the first two categories you might find business motoring, cyber, health and safety, insolvency and late payment, negligence and breach of duty and contravention of a variety of regulators' statutory frameworks.

As for emerging risks, ESG issues are arguably the biggest as the UK transitions to a Net Zero economy.

However, the Pensions Schemes Act 2021 now means executives can face fines of up to £1 million for breach of new criminal offences. Further reform of audit and governance regulations is also being mooted.

Want to learn more about D&O insurance?

You can request a copy of our new, detailed Directors & Officers Liability Insurance guide by emailing Simon Mannion or calling him on 0161 304 5037.

If you're concerned about the potential liabilities you may face, Simon, or your RBIG account manager would be happy to offer a personal consultation. This would identify the risks specific to you and how D&O insurance might protect your exposure to them.