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Directors & Officers

Claims examples – where Directors’ & Officers’ cover could respond

While based on real life claim examples details have been altered where necessary – “to protect the innocent”

  • A libel claim was brought by a director of a company against a trade journal, after they published the comment of a director from a competitor company.  The publisher of the trade journal made a third party claim for contribution and/or indemnity against both the competitor director and company.
  • It was alleged that company information, provided by directors who had issued a prospectus in an attempt to attract further investment interest in their company, was misleading.
  • A group of former employees of a company took ‘action’ against the human resource department director and company secretary on grounds of unfair dismissal.
  • An employee, alleging wrongful termination of employment and sexual harassment, sued a company, along with a director.  This type of incident is on the increase and the awards and damages being handed down are rocketing.
  • Shareholders brought an action against the board, alleging that an excessive Golden Handshake had been paid to a former director.
  • There have been a number of cases where companies have been trading whilst they are insolvent.  In these instances, there are a number of breaches of authority taking place and proceedings could be commended under various acts e.g. Insolvency Act 1986, Directors Disqualification Act 1986.

The response of an insurer to an actual claim will be dependent on the coverage selected and any exclusions or limitations that may apply.