Directors' and Officers' insurance (D&O)

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D&O Liability insurance

If things go wrong in a business, the senior managers, including directors, officers and partners, are at risk of claims being made against them.

Directors’ and Officers’ (D&O) insurance and Management Liability insurance can help protect these individuals against the resulting financial costs, such as fines and legal fees.

Investigations into directors personally. whistleblowing, and the self-reporting regime could all lead to a director needing the assistance of legal counsel to put forward their case. As these are personal claims, a director’s personal assets could be at risk.

D&O insurance is there to pay for costs relating to mounting a defence, and any damages or settlements relating to the matter. Any allegation made by a third party against a director or officer, no matter how frivolous, needs to be vigorously defended, otherwise, there is a risk of judgement being entered in default of a defence. 

Other areas that give rise to claims include:

  • Positions on outside boards 
  • Wrongful termination, sexual harassment or discrimination 
  • Initial public offerings

Directors and officers can be held liable for their own actions and inactions – and the actions of their co-directors.  Directors’ personal liability for the performance of a company is unlimited. If the shareholders want to sue for mismanagement, they can, and do, quite frequently. 

What does Directors’ and Officers’ insurance cover?

Directors’ and Officers’ (D&O) Liability insurance gives financial protection in the event you are sued personally. D&O protects you against claims made against you or your co-directors within the scope of your everyday business.

It is there to cover you for legal costs as well as any damages. 

D&O insurance covers directors' acts and the cover should extend to those individuals that are subject to regulatory approvals (such as the Senior Managers regime), the Data Protection Officer, General Counsel, Risk Manager and other senior individuals (including employees in managerial capacities).

Notably, D&O is distinct from a Professional Indemnity policy (which may be referred to as “PI”, Errors & Omissions or “E&O”, or Civil Liability), which is designed principally to protect the company from any claims arising out of professional business (for example, poor advice or service to a client).

What is covered

  • Legal costs

    Subject to the terms of the policy, D&O will cover the legal costs of defending your reputation, including criminal proceedings.

  • Compensation payments

    D&O insurance will pay damages arising from alleged acts, errors and omissions.

  • Investigation costs

    D&O covers day-to-day costs relating to responding to a variety of investigations, including attending interviews with insolvency practitioners.

  • Director disqualification proceedings

    D&O covers costs relating to defending directors from being disqualified from holding office. 

  • Personal liability for corporate tax

    Where individual directors are held liable for corporate taxes due, D&O can step in to pay.

  • Extradition proceedings

    Providing finance to mount resistance to extradition requests.

Not covered

  • Criminal fines and penalties

    This includes FCA fines, or any other liabilities that are uninsurable as a matter of law.
     

  • Proven dishonest or fraudulent conduct

    However, if such conduct is alleged, the policy requires insurers to provide legal costs on an ongoing basis, unless/until proven guilty
     

Optional

  • Run Off Cover

    Where directors retire or companies are sold, run off cover offers the indivduals protection should claims be reported relating to their tenure with the organisation.

  • Distressed situations

    When faced with distressed situations in the business, for example insolvency, many directors choose to revisit their policy and examine limits and terms before proceedings begin. 

Why choose Howden for D&O?

Howden’s D&O team offers the marker leverage and expertise to deliver for clients, providing solutions to what can seem to be insurmountable issues.

Our team advises on the specific coverage limitations and implications and engages with insurers who are willing to specifically underwrite policies we present.

Writing our own bespoke policies means wordings are designed to be favourable to the insured, so you can have the utmost confidence you will be protected.

$1.2bn

premium placed into the Financial Lines market in 2022

30

in-house lawyers and senior claims handlers

Everything is focused on the prompt payment of claims

For an insurance broker, the connection between claims and account management is the difference between happy or irate clients, and good outcomes versus bad ones.

We make sure that our legal, technical & claims specialists are involved throughout your insurance cycle.

Our claims advocates and lawyers are fully embedded into the end-to-end client service process, right from the policy design phase. From the outset, they work with the account management team to get your wordings right. They are on hand for technical queries through the policy period. Then they handle any claims that arise – and so carry that knowledge of your business and your wordings throughout the whole process.

Finally, they feed this back in to your account management team at renewal – using what they have learned, to drive the best cover, structure and price. A continual cycle, driving challenge and improvement.

Our legal, technical and claims specialists deal with D&O claims, day-in day-out. They are deeply experienced in handling large, complex and high-profile cases. 

Unlike other brokers, we don’t outsource our claims function, or treat is as a back-office thing. To us, claims is the engine room and should be front and centre of the whole placement process.
Office

Howden's Fund D&O Insurance portal

At a time when efficiency and quality are essential, our Fund D&O portal has been uniquely constructed with both in mind. Not only does the portal deliver on the most competitive premiums, but does this on our bespoke Howden written D&O policy wording.

We have partnered with Newline, Allied World Assurance Company, Starr and Sompo, to create a portal offering backed by 100% AM Best A-rated capacity.

D&O Report 2024 front cover image square

Report: D&O 2024 Outlook

Our latest D&O market report examines current trends and their effects on premium pricing going forward.

Meet the team

Photo of Kurt Rothmann

Kurt

Kurt Rothmann

Executive Director
Photo of Kurt Rothmann

Kurt Rothmann

Executive Director

Kurt joined Howden in November 2020 after spending 8 years at JLT. He has worked with many large and complex multinational clients providing strategic advice, programme design and service delivery. Kurt has 27 years of insurance industry experience, including 7 years in Johannesburg before moving to London in 1999. At both JLT (and Aon before that) he headed up the management liability team. Prior to his career in insurance, he studied law at the University of Cape Town, graduating with a BA LLB. After being admitted to practice as a solicitor in South Africa, he moved to work in-house with one of the then largest South African insurance intermediaries, Glenrand MIB.

Photo of Lianne Gras

Lianne

Lianne Gras

Executive Director
Photo of Lianne Gras

Lianne Gras

Executive Director

Lianne has spent most of her career at Howden and has over 20 years’ experience placing International bespoke risks into the London and global insurance markets. Although experienced across all classes of financial lines she brings particular expertise in delivering highly complex and tailored solutions within the Directors and Officers class. She works with multinational organisations and large government institutions navigating rapidly-evolving exposures across highly-regulated sectors. A particular specialism for those organisations with US exposure be that foreign issuers to US exchanges, IPO’s or reverse merger / despac transactions.

Photo of Adam Swinburne

Adam

Adam Swinburne

Divisional Director
Photo of Adam Swinburne

Adam Swinburne

Divisional Director

With over 26 years' worth of experience, Adam specialises in handling and placing Directors’ and Officers’ Liability, Crime, Financial Institutions Professional Indemnity and Investment Management Insurance in the UK, EEA and Australia. Adam helps a range of of large corporate and SME clients in sectors such as accountants, solicitors, financial advisers, property valuers, property management, investment platforms and investment managers.

Photo of Michelle Allen

Michelle

Michelle Allen

Divisional Director
Photo of Michelle Allen

Michelle Allen

Divisional Director

Michelle joined Howden in 1999 and has over 22 years’ experience in Financial Lines, specialising in Directors’ and Officers’ Liability policies. She has extensive experience with both international and UK clients working on large and complex placement structures. Michelle’s role includes responsibility for client service within the International division of FLG overseeing a team of 15+ Account Executives. She also works with FLG’s Legal & Technical team on the drafting of Howden’s flagship D&O products, provides technical resource both internally and to clients and contributes regularly to FLG’s Thought Leadership output.

Contact our D&O team today

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We recognise that the current economic conditions are putting pressure on many households and businesses. At Howden, we are committed to finding ways to assist our customers who may require additional support during these times.

If you’re currently facing financial difficulty, please speak to us about your insurance policies by:-

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