The NonProfit D&O Liability coverage provided here is written on a claim made basis. Except as otherwise provided, this policy will cover only claims first made against the insured during this policy period

THE COVER
The policy may be in two parts:
• an indemnity to the company in respect of the costs it incurs in indemnifying a director against the successful defence of a claim;
• an indemnity to the director in circumstances where this cannot be obtained from the company because the defence has not been successful.

This second part comes about because companies are prohibited by the Companies Act from indemnifying directors in unsuccessful defences, but permitted to buy insurance to cover the risk.

THE RISKS
Liability may arise out of lack of care and skill in the performance of the duties, e.g. negligent advice or misstatement, particularly in the context of a merger or takeover when failure to understand economic trends results in a poor forecast of the company’s performance.

Any act which goes beyond the company’s constitution such as;
• excessive borrowing;
• unauthorised payments;
• failure to disclose the full extent of the directors’ interests; or
• failure to comply with requirements
may involve a director or officer in a personal liability.

Liability may also arise out of the failure to arrange proper insurance; for example, public liability or products liability covers with inadequate limits of indemnity.

Under the provisions of the Insolvency Act, directors may be personally liable for ‘wrongful trading’ and liquidators can seek contribution from them if they failed to take reasonable steps to minimise the losses.

The limit of indemnity: The policy pays for any damages and for defence costs in relation to claims.

EXCLUSIONS
• claims for bodily injury or damage;
• actions brought against an individual director as a result of their own dishonesty, fraudulent or malicious conduct;
• claims arising from improper personal gain, profit or advantage;
• breaches of professional duty.

Claim form  – {Apply to the office providing all information and request for legal assistance }

Directors and Offices Liability Insurance Application

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