Directors and Officers Insurance

[supersteamer]

Would anyone be able to clarify when I might need Directors & Officers Insurance? This doesn't appear to be a common "thing" for contractors but I'm not entirely clear why (just because it's a tiny company, it's still a company....)
Under what circumstances might a client be able / willing to claim against me as a named director vs. claiming against my company (which of course has PI)

Is it worth having if feeling particularly risk averse (I know of course it's not mandatory) - and if so any recommendations on a provider?

[northernladuk]

Care to give us some context here. D&O covers directors and officers of a corporation if they damage the corporation in breach of their legal duty.

Not something that affects us. It's not for clients.

You say it's not a common thing. I've never heard of it in all my time on here. You can read about it here.

https://en.m.wikipedia.org/wiki/Dire...lity_insurance

[supersteamer]

Context is that I was checking my PI policy and saw that directors and officers liability was one of the exclusions.
I’m just trying to get my head around what that means and should I be bothered?
The insurance sites selling D&O are obviously pushing that even micro companies need it; every other site seems to suggest it’s not relevant for Ltd Co contractors.
The Wikipedia reference is fairly American flavoured (flavored?) - not sure well it translates to UK law. I have searched but it all seems a bit woolly.
The basic question I have is: under what circumstances could a claim be made against the named director of a one person company (rather than the company itself) in this country?
And who could realistically make this claim?
Once I understand this I’ll better judge whether or not to even think about it any further!
Thanks

[northernladuk]

It might be American flavoured but it gives more than enough information to be able to make your conclusion surely. The paragraph I quoted should be enough no?

They screw the company over the shareholders can hold them liable. We have next to no responsibility for anyone else but ourselves so not needed.

Even if it is American this list is still pretty pertinent.

Other claims arise from*shareholder-derivative actions, creditors (particularly after entering the*zone of insolvency), customers, regulators (including those that would bring civil and criminal charges), and competitors (for anti-trust or unfair trade practice allegations). For nonprofits, claims are typically related to employment practice and less commonly regulatory or other fiduciary claims.[10]*For private companies, claims are often from competitors or customers for antitrust or deceptive business practices

Which of those apply to us?

[northernladuk]

Here is a UK page.

https://www.markeluk.com/articles/wh...cers-insurance

Another list to ponder.

Claims by investors and shareholders who blame directors personally for their losses
Actions brought by liquidators, where they suspect wrongful trading or incorrect payments to creditors
Actions brought by HMRC where insolvent trading or misappropriation of tax payments is suspected
HSE investigations where negligence is suspected
Police and SFO investigations where fraud is suspected

[northernladuk]

And a final note. Even QDOS don't bother selling it which speaks volumes.

http://forums.contractoruk.com/showthread.php?t=113448

[TheFaQQer]

I buy mine through Kingsbridge - part of their standard product offering.

If you face criminal or regulatory charges, your PI insurance won't cover it and you'll have to fund that yourself. So unless you are certain that you aren't going to face anything like that then it's definitely something that every company director or officer should consider taking out, no matter the size of the organisation.

For the buttons that it costs it's almost a no brainer, and if you were a director of another company I would expect them to provide D&O as part of the contract.

[northernladuk]

So unless you are certain that you aren't going to face anything like that then it's definitely something that every company director or officer should consider taking out, no matter the size of the organisation.
.

That's a bit wooly.l though isn't it? What is your advice to a standard contractor Ltd director?

[TheFaQQer]

That's a bit wooly.l though isn't it? What is your advice to a standard contractor Ltd director?

I would (and have) take it out - when I renewed my insurance this year and shopped around, it was cheaper to include it with Kingsbridge than the quote from COH, Qdos or Direct Line without it, so it really was a no brainer.

I tend to err on the side of caution though - but while it's not something that a client or agent would insist on, I think it makes sense in case there are any regulatory claims brought against the company.

[northernladuk]

I would (and have) take it out - when I renewed my insurance this year and shopped around, it was cheaper to include it with Kingsbridge than the quote from COH, Qdos or Direct Line without it, so it really was a no brainer.

I tend to err on the side of caution though - but while it's not something that a client or agent would insist on, I think it makes sense in case there are any regulatory claims brought against the company.

Hmm me too but in this case I can't remember seeing any articles or posts about this in the past. On top of that the ones I found while researching say it's not needed so I'm quite happy to forget this one unless some tangible reason to to rethink appears.