Directors & Officers Liability Insurance

Directors and Officers have specific responsibilities, duties and powers relating to their positions with their businesses. It is therefore very important as a Director of a business that you consider Directors and Officers Liability Insurance and how it can help protect your personal assets.

Directors and Officers Liability Insurance protects companies’ directors, officers and senior management teams against claims arising from their decisions and actions taken whilst managing the business. The directors responsibilities are defined both in common law and in statutes such as the Companies Act, Insolvency Act, Environmental Protection Act ,Financial Services Act , Health and Safety at Work Act, to name but a few.

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As a Director of a business your personal assets are at risk in the event of a claim being brought against you for a “wrongful act”.  A “wrongful act” can include :

  • breach of trust
  • breach of duty
  • neglect
  • error
  • misleading statements
  • wrongful trading

Directors cannot rely on the company indemnifying them. Such an indemnity from the company can in some circumstances be in contravention of the Companies Act. In any case in the event of insolvency there will be little prospect of your company being in the position to indemnify the Directors and Officers. If a Director or Officer of your company is found to have acted outside of their terms of reference, civil, criminal or regulatory proceedings can be brought against them.


Claims can be made against a director by a wide range of stakeholders including:

  • Government and Regulatory bodies such as the CQC
  • Creditors
  • Employees
  • Auditors
  • Liquidators
  • Suppliers
  • Customers
  • Shareholders

As a company director you no doubt try to ensure that your care home businesses’ assets and liabilities are insured correctly. But are you ensuring that your own personal assets are covered should a claim be made against you?

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