Are you protected as a director?

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It is now common practice for businesses to purchase Directors & Officers (D&O) Liability Insurance but do you have any other insurance protection for your Directors and Senior Officers? If not then you need to consider Management Practice Liability, this offers far wider cover than a standard D&O Policy, highlights include:

Employment claims

This is by far the most common type of management liability claim, including claims for unfair dismissal and sexual, racial, gender or age harassment or discrimination.

Regulatory investigations and prosecutions

Red tape is a fact of business life and a common concern to business owners. With the complex regulatory landscape affecting all UK companies it is easy to see why there has been an increase in investigations and prosecutions. Actions can come from government led regulators or more industry specific. A small sample of active regulators includes the following, all of whom have the power to close your business or impose financially crippling fines:

Shareholder/Investor claims

Typically such claims are made against both the business and the Director.

Employee and Third Party fraud

Almost one in five small businesses has suffered as a result of fraud by an employee at some point during their history (Source: Action Fraud).

In addition the Management Liability Policy can be extended to include

We have obtained some sample claims from a leading provider Axa/Rradar

Example 1

An employee went off on sick leave and the employer contacted rradarstation, asking whether it would be acceptable to call on the employee at home as they were concerned about her welfare. It was suggested that they wait until the sick note expired.

Meanwhile, evidence was discovered of performance problems and rradarstation specialists advised that an investigation should commence, leading to a disciplinary procedure if needed. After her sick note had expired, the employee still could not be contacted.

Further information emerged about the gravity of the performance issues. rradar advised that the employee should be invited to a welfare meeting before any disciplinary action, drafting a letter for the employer to use. rradarstation also provided guidance on handling the process as the meeting was rescheduled several times.

The employee finally submitted her resignation before a welfare meeting could be arranged

Example 2

A Business received a visit from the police who had been investigating another matter involving one of the client's employees. During the investigation, they had discovered payments from an account operated by the client and they wanted verification of the amounts and reasons for them. An investigation revealed that the employee, who was in a senior financial role, had been embezzling sums of money from the client. The client was extremely concerned, not least for the sums that had been embezzled by the employee.

They contacted rradar to get support and advice on what to do in this situation.

The rradarlegal team were able to guide them through the process of making a claim under the employee dishonesty section of the MLP

Example 3

The client is a franchised UK car dealer. An employee submitted a claim to the Employment Tribunal, claiming that he was being bullied by senior management.

The client turned to rradar to help them deal with the situation.

rradarstation provided guidance and support on how to manage the Tribunal process. In addition, rradarstation carried out an investigation into the circumstances of the claim. As a consequence, rradar was able to provide the client with five witness statements that proved the claimant's case was not accurate.

In the face of this, the claimant withdrew his claim. The client was able to concentrate on their business without the threat of a Tribunal hearing and the possibility of a large financial penalty hanging over them

Example 4

During a routine maintenance operation at an open cast mine, one of their drivers was killed in an accident.

The client was subject to an investigation and a subsequent fatal accident inquiry.

The rradarlegal team was able to provide representation both during the investigation and the inquiry. They managed to persuade the court that the client was not to blame for the accident as the driver had acted outside the company's instructions and procedures.

rradar's involvement with the case meant that there were ultimately no criminal proceedings and the client was able to concentrate on running a successful business

If you would like to know more about the Management Practice Liability policy and the cover it offers then please contact Paul Masters or call on 0121 631 3051

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Dunsby Associates Insurance Brokers Limited
4th Floor
New Oxford House
16 Waterloo Street
B2 5UG
0121 631 3051 0121 665 6280