// RMC & RTM Insurance

Directors and Officers Insurance

As a director or officer of a Resident Management or Right-To-Manage company, you have specific duties and responsibilities that places personal liability on you. Our directors and officers (D&O) liability insurance covers you against the cost of defending any claims brought against you if those duties and responsibilities are not carried out.

As a Director or Officer of a management company you typically act out of good will – yet you could be fully liable for negligence if a fellow leaseholder were to suffer a financial loss as a consequence of a decision you have made or any action that you have taken, or failed to take.

As far as the law is concerned, you are personally liable, just as if you were running a large, commercial company.

The Law
Directors liabilities have increased considerably over time with the implementation of a raft of legislation, including the Company Directors Disqualification Act 1986, the Insolvency Act 1986 and the Environmental Protection Act 1990. These Acts impose personal liabilities upon Directors or call upon you to contribute personally, if you or the company you manage are found liable. Even if allegations are not proven in a Court of Law, the defence costs incurred can be cripplingly expensive.

The company will need to be a limited company and registered with Companies House. The registered company will be the insured entity. The registered name and address will need to be supplied to the insurer using their proposal form.

How Might A Claim Arise?
There are various duties imposed on a Director or Officer including:
Common law duties
– legal precedents established from many years of case law
Fiduciary duties
– to act honestly
– to act in good faith
– to act in the best interests of the company at all times
– not allowing personal interests to conflict with those of the company
Duties of skill and care
– to exercise the same level of care that a person would use in the management of their own affairs
– to exercise the level of skill expected from a person with their knowledge and experience
Statutory duties
– where an offence under an Act is committed by a company with the consent or connivance of a Director, or is attributable to his neglect, that director is also guilty of the same criminal offence and can be punished accordingly

Insurance Protection
FirstPort Insurance Services Limited are pleased to be able to offer a Directors and Officers Insurance policy that provides cover in respect of:
– Legal liability of Directors and Officers for errors and omissions committed in their capacity as directors or officers
– Claimant’s and your defence costs
– Company reimbursement insurance, which allows the company to mitigate both its own financial liability and that of its officials
– Representation expenses incurred in connection with:
– An official investigation into the company’s affairs
– The prosecution (criminal or otherwise) of any Director or Officer which arises out of a wrongful act
– Cover for damages and settlement sums awarded as well as the costs of defending the action

Essentially the policy will provide protection in relation to “wrongful acts” such as breach of duty or trust, neglect or error or omission in the performance of your duties as Director or Officer of the company.

We can arrange this important cover to specifically protect you in regard to alleged wrongful acts such as breach of duty or trust and neglect, error or omission in the performance of your duties.

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