Directors and Officers Liability Insurance

Reading through articles in property magazines you are often prompted to review your insurance coverage to ensure you have sufficient financial protection in place should the unthinkable happen. But how often do you consider the risks associated with your role as an RMC director or committee member?

You may be familiar with running a company; you may even sit on a board of directors, content in the knowledge that if anything goes wrong the company will look after you and protect you. But what if your personal assets were at risk for every decision you made, either as a company director or as an unpaid volunteer of a committee, club or association? What if there was no limit to the amount you could be held responsible for?

It is an all too commonly held misconception that your role within a company or sitting on a committee as a volunteer is protected. Unfortunately, this is simply not the case. Your decisions and those of your fellow board or committee members could end up costing you everything you own.

Explaining to your family that you have to sell your home because John Smith from number 32 is suing you, as a result of something you did or didn’t do in your unpaid position on the RMC, could make for an extremely unpleasant dinnertime conversation! You don’t even need to have done anything wrong to be faced with legal costs. If you are accused of something that has no foundation, you may still have to take legal advice and defend yourself. If you have ever had dealings with a lawyer you will know that their professional services do not come cheap.

All RMC directors should make it a priority to ensure that, having looked after everyone else, you now spend some time looking after yourself. Directors and Officers insurance coverage has been designed specifically to take care of these exposures and is widely available, offering broad coverage at a relatively low cost. Specialist underwriters are available to offer you this protection, so consult your broker for further advice and a quote before the time comes to have that mealtime conversation.

It couldn’t happen to me or could it?


The purpose of a Directors & Officers policy is to provide defence costs and/or compensations for Civil Liability arising from the Wrongful Act of a director or officer in the running of the company.


Wrongful Act is defined in the policy as:-

Any actual or alleged

  • Breach of trust
  • Breach of warranty
  • Neglect
  • Error
  • Omission
  • Misstatement
  • Misleading statement

committed by Persons Insured

Claims made basis – regardless of when a director or officer commits a wrongful act, indemnification will be provided by the policy in force at the time of its discovery.

Persons Insured – present directors and officers, former directors and officers, future directors and officers. Spouses, heirs or legal representatives in the event of death, bankruptcy or insolvency of a director or officer.

Limits of Indemnity – a limit of indemnity of up to £1 million may be chosen, which will include payment of costs. A claim payment will reduce the limit of indemnity by the claim amount until the renewal date of the policy, unless an additional premium is paid to reinstate the full sum insured.

Extensions available

Extended reporting period

Discovery Clause – the option to purchase extended period of cover in which to notify claims in the event of cancellation of policy cover.

Company Reimbursement – reimbursement to the company where it is obliged to indemnify the directors.

Defence Costs – arising from bodily injury limit £50,000.

Main Exceptions

  • Dishonesty,Fraud, Malicious Conduct or Personal Profit.
  • Bodily injury (other than defence costs)
  • Property damage
  • Fines, penalties and damages
  • Pollution
  • The first £100 of each claim
  • Failure to maintain any insurance policy unless Property insurance is arranged through Residentsline.

Special Features

Specialist Claims Services
Legal and Tax helpline
Counselling Service – available to all employees

Click here to get a quote or call Residentsline on 0800 281235.