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You are here: Home - News & Articles - Directors & Officers Liability – A Common Myth Dispelled.
Directors & Officers Liability – A Common Myth Dispelled
Directors can be held liable if the Business Continuity Plan fails….or was not there to start with.
The personal risks involved in holding a senior post have never been greater, especially as the legal and regulatory environment is increasingly switching its focus, from corporate to personal accountability.
Have you fully tested your disaster recovery plans?
Do your plans fit with your current legal, commercial and contractual requirements?
When something goes wrong will you be personally responsible? A common myth is that limited liability status protects directors from being sued personally. It does not.
The potential liability can be severe both personally and professionally.
Directors and Officers’ Liability (D & O) insurance from Towergate Risk Solutions is designed to protect you from the increasing personal liabilities you face when running your business.
YOU CAN BE SUED for mismanagement, negligence, unfair dismissal, libel and slander, breach of duty.
Examples- The first involved OLL, the activity centre responsible for the deaths of four schoolchildren in a canoeing disaster in Lyme Bay, Dorset. Its managing director was jailed for three years in 1994.
In the second case, the managing director of Jackson Transport (Ossett) Ltd was sent to prison for a year in 1996 following the death of an employee who inhaled chemicals.
Consider your obligations beyond Disaster recovery – regulatory investigations e.g. the FSA, Health and Safety Executive, Revenue and Customs. It is worth considering that you don’t have to have acted wrongly to be personally sued – the claim could be spurious but you would still have to defend it. D & O insurance responds against both actual and alleged actions.
Contact Perry Jeandren on 01202 634899 or email perry.jeandren@towergate.co.uk for a quote and policy details.
Article written by Perry Jeandren| Date added: June 11, 2006