There are many people involved in the successful day-to-day running of a block of flats, for example: directors, residents’ committee members, trustees and officers. It is important to protect the personal liability of such individuals.

Directors and officers’ liability insurance – also known as D&O cover – provides financial protection in case legal action is taken against such an individual. Entity cover is also available for groups and companies such as a residents’ association, property management firm or resident company limited by guarantee.

  • Defence costs of health and safety (including corporate manslaughter)
  • Trading standards, environment or other regulatory claims
  • Defence costs and awards of claims:
    1. By individual shareholders
    2. Arising from administration of any company pension or employee benefit scheme
    3. Arising from pollution
    4. Arising from any failed private offering
  • Ten years run-off cover after a director retires
Additional policy benefits
  • The policy can be packaged as part of a management portfolio including:
  • Directors and officers liability
  • Employment practice liability
  • Corporate legal cover
  • Packaged together they cover your company as well as the individuals employed by you
  • An excess is not payable if a claim against you as an individual is successfully defended
  • You can pay interest free by direct debit
  • No annual renewal forms so you are assured continuous cover without inconvenience
Entity Cover

Entity cover provides additional protection for the business (the ‘entity’) where an action is brought against the company rather than an individual. In these circumstances, standard D&O policies would not pay the claim. The policy covers the entity’s legal costs and expenses in defending such claims.

Typical situations where entity defence cover would be relevant would include:

  • Identity fraud in establishing that someone has fraudulently entered into an agreement with a third party by representing themselves as the entity.
  • Breach of contract investigations in defending a claim which alleges breach of contract for goods or services provided.
Typical Exclusions:
  • Deliberate or dishonest acts

A dishonest or fraudulent act.
Acts intended to secure a personal profit to which the insured is not legally entitled.

  • Prior claims, investigations and circumstances

Any claims or investigations to which you were aware of arisen prior to the start of the policy

  • Prior litigation

Any litigation arisen prior to the start of the policy

  • Defined benefit pension schemes
  • An excess will apply to claims not successfully defended against the company

These are just some of the key exclusions/limitations, full details will be found in policy wordings.

What happens to the policy in the event of a merger or take-over?

In the event that someone acquires more than 50% of your company, or you consolidate with another company, we have procedures to amend your cover.

Will we remain covered in the event of a management buy-out?

As standard you are covered for 30 days after the event of a management buy-out.

Do you require a shareholder to hold a certain percentage to be eligible for cover?

There is no minimum or maximum amount for eligibility.

When does a claim have to be reported to the D&O carrier?

Typically the claim has to be first asserted or “made” against the insured during the policy period. This is why D&O insurance is generally referred to as “claims made” coverage. Many carriers provide some degree of a reporting “tail” to allow a short period of time after the policy expiration in which to provide notice of claims that came in during the policy period.

Who selects defence counsel for a covered D&O claim?

It depends. For securities claims involving public companies, many insurers have a pre-set list of law firms that they require you to use (with pre-set, usually advantageous rates). For non-securities claims for publicly traded companies, you can usually select your own defence counsel.

At Adler Insurance Brokers, we are committed to providing you with a high-quality service which we strive to maintain throughout the duration of the policy. In the event of the worst happening, you will deal direct with our in-house claims team.

The claims team understand how vital it is to minimise the interruption to your business in times of distress, so claims are handled as quickly as possible. For large and more complex claims, loss adjusters are provided to handle your claim and help secure the best possible outcome.

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