UK bosses could face a wave of coronavirus – related Directors & Officers claims
Administrators, managers, and directors of any company, regardless of its size or activities, shoulder significant responsibilities in relation to the way they conduct themselves and justify the trust placed in them. This may result in claims against them for actual and alleged breach of duty, neglect, misstatements, errors, and omissions.
Actions against the company and its management can involve a high degree of personal liability for these individuals. With potential penalties that range from hefty fines, all the way to disqualification and possible imprisonment, the need for an immediate and effective response to any threat is clear.
An uptick in litigation targeting directors and officers is a likely consequence of the current COVID-19 pandemic.
D&O insurancepolicies offer liability cover for company managers to protect them from claims which may arise from the decisions and actions taken within the scope of their regular duties. As such, D&O insurance has become a regular part of companies’ risk management. Companies purchase D&O cover because managers can make mistakes.
D&O coverage includes financial protection for managers against the consequences of actual or alleged “wrongful acts”. Policies cover the personal liability of company directors but also the reimbursement of the insured company in case it has paid the claim of a third party on behalf of its managers in order to protect them.
Coverage is usually for current, future, and past directors and officers of a company and its subsidiaries. D&O insurance grants cover on a claims-made basis. This means that claims are only covered if they are made while the policy is in effect or within a contractually agreed extended reporting period, which can extend up to another 72 months or even longer in some countries.
Click hereto find out more about the benefits of D&O cover