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Being a company director is increasingly risky in this litigious society.
Company directors can find themselves in court – as individuals as well as company officers – for a whole range of issues. Personal claims or proceedings against directors or officers can arise from inadvertent wrongful acts or decisions in the workplace. These range from claims made by disgruntled customers, all the way to official investigations.

If the court finds against them as individuals they can have to meet the legal expenses of defending a claim, awards for damages and regulatory fines – hence putting their own assets, such as savings, house, car etc at risk.

Many company directors don’t realise that if they are fined, they cannot charge it back to their company and that it is a personal liability so it’s vital that they understand the legislation that applies to them as directors and the implication of any claims that might be made against them. Hence the need to ensure that they are properly protected if the worst happens.

Claims where personal liability can be involved typically involve one of the following:
• Claims by investors or shareholders blaming directors or officers personally for losses on their investments or shareholdings
• Actions by liquidators for suspected wrongful trading
• Prosecutions brought by HMRC for suspected insolvent trading or tax fraud
• HSE investigations for suspected breaches of health and safety legislation
• Police or SFO investigations involving fraud or illegal trading practices
Since 1993, actions against directors by the Department of Trade & Industry have risen by over 400%.
Company Directors & Officers need to ensure they are properly covered in case the worst happens

Directors & Officers Insurance is an area Isca Barum can advise on and provide the right policies tailored to individual needs and circumstances – contact us now for more information. icon of figure holding sign saying 'Help!'


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