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Protect your personal assets, home, savings and pension fund
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Limit of indemnity of up to £5 million
- Optional cover for crime and employment practice liability
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The FPB has teamed up with Qdos Consulting to offer members comprehensive and cost-effective directors' and officers' (D&O) insurance, with optional cover for employment practice liability and crime.
This service is available to full members of the FPB.
Why D&O insurance is worth having
 The threat of personal litigation against the directors and officers of companies of all sizes continues to increase, yet many small and medium-sized businesses are oblivious to the risks, which could prove to be costly in both time and monetary terms, and could lead to imprisonment.
Directors' personal assets, houses, savings and pension funds are at risk, whether they have acted deliberately, negligently or innocently.
D&O insurance is not designed to cover dishonest or fraudulent acts, but there are plenty of examples of directors being found personally liable when they have not been dishonest, deliberate or fraudulent; they have just failed to take sufficient care. In such cases, awards and defence costs would be covered by this insurance.
How directors and officers are exposed
Financially – they are personally liable for their actions. Potential litigants can include employees, creditors, customers, competitors and regulators.
| More than 1,500 directors were disqualified in 2004; disqualification orders can last up to 15 years. |
Criminally – their liberty is at stake and, financially, the costs of defence can be high; sometimes reaching six-figure sums. Directors could go to prison for their actions, inaction or ignorance. D&O insurance cannot cover the criminal penalties as that is against public policy, but it can cover the costs of defending a claim up until the point that guilt is established.
Through investigations by regulators or trade bodies – an area of high financial risk and one of the biggest triggers for claims in the UK. The Department for Enterprise and Regulatory Reform's Companies Investigation Branch considered complaints against nearly 5,000 companies last year. The financial risks of investigations are considerable.
Qdos' underwriters pay out more for investigations in the UK than anything else under D&O cover. |
To their own employees – whether for allegations of sexual, racial or disability discrimination, directors could easily find themselves defending their actions, or inaction, at employment tribunals as well as in the media. Responsibility and liability for their actions remains with directors, long after they have left the company, even into retirement.
This D&O insurance offers executives protection from the financial consequences of their past, present and future actions. Cover includes defence costs against actions which could threaten their personal assets and could lead to imprisonment. |
How D&O insurance differs from legal expenses insurance
The policy limit for the FPB's legal expenses insurance (LEI) is £75,000 (per head of cover) and is therefore inadequate for larger, protracted actions. What is more, D&O insurance covers actions regardless of whether they are likely to be won. Faced with a career and lifestyle-changing crisis, directors will not want to rely on an LEI policy that will only cover them if they are likely to win the actions.
How much it costs
Below are examples of some of the rates, but you can view the full table of rates here.
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Limit of indemnity |
£100,000 |
£500,000 |
£1,000,000 |
£2,000,000 |
£5,000,000 |
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Turnover |
Up to £10m |
£150 |
£350 |
£500 |
£700 |
£1,150 |
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£10m to £25m |
N/A |
N/A |
£890 |
£1,350 |
£2,100 |
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£25m to £50m |
N/A |
N/A |
£1,100 |
£1,600 |
£2,550 |
+ Employment practice liability (EPL) option From £351
+ Crime option From £350.10
What the 'employment practice liability' option covers
Any employee suing in respect of an alleged employment practice violation is likely to direct the action at the employer who, in most circumstances, will be the company. The employee may, particularly in cases of discrimination, also name individual colleagues, supervisors or directors. As such, it is important to protect both employees and the company.
What the 'crime' option covers
Employee dishonesty or third-party computer funds transfer fraud can cause large losses and can even financially devastate small and medium-sized companies. It is therefore important to protect the company against such losses. In addition, expenses cover is provided for any corporate identity fraud.
Find out more
1. Call the FPB's member helpline on 0845 130 1722. 2. Email your question or contact information to directorsinsurance@fpb.org and we will respond on the next working day. 3. Complete the short form below and you will be contacted as soon as possible.
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