15/02/2021
5 things you didn’t know about D&O Insurance
The world is an increasingly litigious place, with both individuals and businesses facing an increased risk of legal action for a range of alleged wrongful acts, which could leave them significantly out of pocket.
It’s little wonder, therefore, that D&O Insurance is an increasingly sought-after policy for both corporate and nonprofit organisations alike. It provides protection to the individual directors, managers and officers, covering the cost of legal expenses and damages, ensuring that their personal assets are not at risk.
While you may have been aware of the description above, here are 5 surprising facts about D&O.
1. It provides protection for former directors
That’s right. Not only does a D&O policy protect current managers, directors, non-executive directors (NEDs) and officers, but it also provides protection for individuals who have left the organisation. So, if a claim is brought against a former director in the future, providing the incident occurred when the cover was in force, the policy will cover the cost of legal expenses and potential compensation.
2. It’s suitable for non-profits
Just because your organisation isn’t run for profit doesn’t mean you’re less likely to face legal challenges. In the modern world, even non-profits face risks of legal action from employees, volunteers, supporters and even regulatory bodies, such as the Health & Safety Executive. Thankfully, Directors’ & Officers’ Insurance for non-profits covers individuals in senior positions, whether they’re a board member, trustee, director or manager, so they have complete peace of mind.
3. Pandemic protection
While most D&O policies don’t specifically cover coronavirus risks, they can be extended to provide cover for associated issues.
For instance, the ongoing pandemic and its impact on the economy may mean that your organisation makes difficult decisions about staffing and employment. If you choose to make redundancies and an employee disagrees with the decision, they may try to sue. In cases like these, an Employment Practices Liability (EPL) policy could help protect individual team members against allegations of unfair dismissal.
4. It’s a tax-deductible expense
You’ll be pleased to discover that although D&O Insurance is designed to protect individuals, the cost can be covered by your organisation as a business expense. As such, a D&O policy is a great employee benefit for new recruits, because they know you take your corporate responsibilities seriously.
5. International cover
If your organisation operates overseas, you can extend your policy to protect your teams in those countries. In some instances, your insurer can arrange D&O cover extensions for international markets. However, there are some exclusions. For instance, in Russia and China, you must have a policy taken out in that market for it to be valid. Your broker can advise on the best course of action for your chosen markets.
Arrange your D&O policy today
If you’d like to know more about D&O Insurance and the benefits for your organisation, don’t hesitate to get in touch today.
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