We are happy to announce that Shepherd Compello now has a dedicated Financial lines Senior broker, Erica Mordue. With over 12 years’ experience in the London Market, she is currently in the process of launching a cyber liability and professional indemnity offering.
The need for Directors & Officers Liability, otherwise known as D&O cover, is necessary in light of a changing socio-economic landscape for example, BREXit in the UK (2019) or the General Data Protection Regulations (GDPR, 2018).
The Policy covers specific acts, errors and omissions of both Directors and Officers or employees who operate at a senior level for the company. According to the 2006 Companies Act (section 171-177), claims may emerge from allegations of wrongful acts or misrepresentations which relate to offering, securities, acquisitions or disposals.
Directors and Officers may face claims out of the decisions that they don’t make during the day to day management of a company. The duties are noted above are widely defined meaning that D&O’s are potentially liable for all decisions that they make (or not as the case may be). From an international perspective, there have been a range of corporate accounting scandals such as Enron, Lehman Brothers and Barclays Bank which have affected publicly listed companies.
Directors are under a duty to;
- Act within the powers provided by the company
- A Director must exercise care, skill and diligence which would be exercised by a reasonable diligent person or both;
- Use their general knowledge, skill and experience expected of a person carrying out the functions carried out of a Director in relation to the company (‘objective test’)
- The general knowledge and experience which has happened (‘subjective test’)
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