What is Directors and Officers Protection Insurance?
Most companies must adhere to specific regulations and often come under intense scrutiny to ensure they are doing so. If you’re a company director or officer, you are therefore under pressure to carry out your responsibilities and duties in a precise manner.
In these governing roles, the list of obligations is endless. Exercising due care and diligence, complying with regulations, and avoiding conflict of interest all fall under the responsibility of the company leader. Even business decisions made in good faith can backfire.
Failure to meet these obligations or making the wrong decision could mean you find yourself personally liable.
This could not only cost you your position, but you could also incur compensation costs, fines and be responsible for the demise of the business. Even if you are eventually found to be not at fault, the cost of defending yourself can be substantial.
Do I need Directors and Officers Protection?
Any business with a corporate board or committee should invest in Directors and Officers insurance, including not-for-profit organisations. It doesn’t matter whether your company has a turnover of ten thousand dollars or ten million dollars. Any director or officer, whether in a full-time, part-time or honorary capacity, can face a personal liability claim.
A claim could come from various sources including employees, customers, competitors or perhaps the company itself.
