If you’re new to the world of small business insurance, you may not be familiar with the wide range of cover options available.
For instance, have you ever heard of directors and officers insurance?
As the name suggests, this type of insurance is designed specifically to protect the directors and officers of a company, in the event that a claim of wrongdoing is made against them.
If you are a director, secretary, chief executive officer or an employee, you may be able to organise directors and officers insurance.
The main difference between this type of cover and, say, business liability insurance, is that the individual and not the company is protected by it.
If you are ever accused of committing a wrongful act – a term which commonly applies to such acts as errors, misleading statements, inappropriate conduct, omissions, neglect and breaches of duty – while performing your professional role, your directors and officers insurance can help you cover the costs.
Such costs may include investigative and defence costs, as well as judgements and settlements.
Without this type of insurance, you would have to pay all of these costs from your own pocket. This means a large claim could cripple you financially.
There are a lot of responsibilities associated with being a director or chief executive officer. Some of these will be specific to your company or the industry that you are working in, while others are dictated by law.
You are personally liable for these latter responsibilities, and a claim can be made against you if you fail to perform them.
An offshoot of directors and officers insurance is management liability insurance, which can be organised to cover a broader range of areas.
If you would like to know more, get in touch with MGA Insurance Brokers today.