July 12, 2022

Directors & Officers: Motor Trade

0 comments

Directors & Officers: Motor Trade

What is Directors & Officers (D&O) Insurance?

Director and Officers Insurance is sometimes known as “Management Liability” and it’s there to protect you financially against any claims made against you personally as a director, partner or officer of your business. From health and safety concerns to a claim for breach of duty, negligence, defamation or even pollution, our insurance will cover you against the costs of defending or settling legal or criminal actions.

The costs of defending a D&O claim in court can be hard to predict and can cause financial struggles for an individual director and/or the company. The average cost of D&O claims in the industry are on the rise due to heightened risks of insolvencies and the increasing reporting obligations on directors. With this in mind, Ascend Broking Group quotes a minimum level of cover of £1,000,000 indemnity, although higher limits are recommended.

Is D&O worth having?

If you are a director of a motor trade business with employees, past or present, this cover will be something to consider. Here’s why….

As a Motor Trader, D&O is most commonly used to protect the personal assets of a director following a claim via the employment practices section. This is usually an employee pursuing action against a current or past employer following an alleged discrimination incident, unfair dismissal claims etc.

In the Motor Trade industry, another frequent claim is around legislative breaches including the Health & Safety Act, predominately. This mainly consists of an employer failing to adhere to independently arranging the inspection and servicing of their equipment such as their vehicle lifts, which subsequently cause employee and/or third-party injury.

Who can typically pursue action against a director or officer?

The list is more extensive than you might have imagined:

  • Employees (Old & New)
  • Suppliers & Creditors
  • Competitors
  • Customers
  • Other Directors/Shareholders

How much does D&O insurance usually cost?

The premium of management liability varies and will also be dependent on the indemnity limit the business wishes to cover a director for.

If you would like to explore a quotation and/or if you are concerned about your exposure as a director, then please reach out to our Motor Trade specialist, Steven, who will be able to assist you.

Any questions? Please don’t hesitate to contact one of our team.

Steven.gillespie@ascendbroking.co.uk  |  Office: 07719 069 267