Financial liabilities insurance

Financial liabilities insurance In an ideal world we would never make mistakes or bad financial decisions which could affect our business and employees financially. We would also never become a victim of those who engage in fraudulent or unlawful financial activities.

In the 'real world' however, mistakes can be made and fraudulent activities happen more often than we would like. Let us help guide you and your business through the many different insurance covers available including Directors and Officers, Professional Indemnity, Fraud and Dishonest & Pension Trustees Liability.

Our advisers have the experience needed to assess the requirements of your business and build a portfolio of cover to ensure your business still runs smoothly in the event of a financial disaster, whether it be through fraudulent activities or misadventure.

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More information on financial liabilities insurance >

More information on financial liabilities insurance

Directors & Officers Liability

The commonly held belief that this insurance is only applicable to large or listed companies is misguided. In the current climate of accountability business stakeholders expect more from directors and officers, and their companies, than ever before. All director positions carry the potential of personal liability for a negligent act, an act outside of authority or which is in breach of duty or trust.

Insurance cover protects the individual against legal liability for a wrongful act committed in his or her capacity as director. In addition to compensation the policy will pay the legal costs of any defence.

Cover can include:

Other employees in managerial or supervisory positions
Costs of dealing with a regulatory investigation
Protection for the legal entity of the company
Defence costs relating to pollution or contamination
Protection for employment rights liability
Liability as trustee of a pension fund

Professional Indemnity

It is an unfortunate fact of life that mistakes do happen and any business providing advice, designs or offering services will be regarded as an expert by their clients. In these times of consumer activity anyone who has relied on such expertise will not hesitate to pursue a claim, should they feel that the outcome has not met their expectations.

Regardless of the merit of the allegation the time lost in dealing with it and cost of legal defence can be financially devastating. In some cases, defence costs can exceed the actual damages awarded.

Professional Indemnity insurance will provide indemnity against legal liability to pay damages and claimant's costs and expenses as a result of a breach of professional duty on the part of the business. It also pays for all other costs and expenses incurred in defence of the claim. A choice of indemnity limits is available.

There is a great deal of variation in policy cover between insurers active in this area, which makes expert advice essential. For example, defence costs can be part of the limit of indemnity, or in addition to it and this can seriously affect the choice of indemnity limit.

Cover can include:

Agents, other consultants engaged, or former partners/directors
Dishonesty of employees
Liability agreed under contract
Libel & slander
Breach of intellectual property rights
Payment of unpaid fees or subcontract costs

Pension Trustees Liability

Following widely-publicised pension-fund scandals and recent economic trends, the position of pension trustee is very firmly fixed in the glare of the legal and media spotlight. Trustees who breach their duties or responsibilities may place their personal wealth at risk or in certain circumstances open themselves to civil and criminal penalties.

This insurance cover protects the trustee against legal liability incurred in carrying out his or her duties in the capacity of pension trustee. A choice of indemnity limits is available, appropriate to the needs of individual circumstances.

Trustees are governed by both case law and a number of statutes. Under these pension fund trustees have new powers and responsibilities to oversee the operation of the pension fund and ensure that it meets strict guidelines and standards. They also have obligations to powerful regulatory bodies.

Cover can include:

Other employees in managerial or supervisory positions
Costs of dealing with a regulatory investigation
Theft or misappropriation of the trust fund assets
Legal costs for pursuing professional advisers

Charity Trustees Indemnity

The trustees of any charity have personal duties and responsibilities in the administration of the charity. Any breach of these responsibilities on their part or any other trustee may result in them being held personally liable for any loss falling upon the charity (and therefore upon those who are intended to benefit from it).

Whether a charity is structured as a trust, as an unincorporated association or as a company, the trustees, committee, directors or officers of that organisation (regardless of their actual titles) will all have management responsibility within the organisation. Attached to that responsibility is personal legal liability.

Many charitable positions are unpaid voluntary positions so it is important that protection is provided for those involved.

Insurance cover can protect the trustee against legal liability incurred in carrying out his or her duties in the capacity of pension trustee, committee member, director or officer. A choice of indemnity limits is available, appropriate to the needs of individual circumstances.

Cover can include:

Other employees in managerial or supervisory positions
Costs of dealing with a regulatory investigation
Theft or misappropriation of the trust fund assets
Libel or slander
Professional indemnity cover if the charity provides advice or professional services

Fraud & Dishonesty

Insurance defines theft in a very particular way, generally meaning only burglary or hold-up. There are many other ways in which a business may sustain a loss due to dishonesty, which might involve employees or outsiders.

A fraud might be well hidden, have been operating for a long time and involve substantial sums. Alternatively a computer-based fraud might occur in a very short time frame. The loss might involve goods or money. The consequences can be severe or even threaten the survival of your business. Only rarely is a meaningful recovery made against those responsible.

Insurance policies can protect against losses of this nature. Cover can be restricted to dishonesty of a small section of employees, or extended to cover frauds by others. Separate limits can be arranged for different types of loss, for example computer fraud.

Some policy features can include:

A wide definition of employee, to include temporary and contract workers
Theft, fraud, and dishonesty committed by employees acting alone or in collusion with other person(s)
Theft by any third party involving Computer Fraud or Fund Transfer Fraud
Payment of auditors' fees incurred to substantiate the amount of a claim
No need to identify a particular individual, only to identify a fraud
No requirement that defaulting employees are to be prosecuted - this matter can left to the authorities

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