Directors and Officers Liability Insurance

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If you think there's a clear line between your business and your personal assets, think again. Every day, with every decision, company directors and officers put everything they have at risk because in our directors and officers liability claim, even your personal assets may be fair game.

From the largest public company to the smallest local business, claims against directors and officers are increasingly common. One of every three companies has faced them over the past 10 years.

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Asterisk: 2012 Towers Watson Directors & Officers Liability Survey.

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And it doesn't matter if your stock's not traded on an exchange. Your directors and officers could be sued by suppliers, customers, employees, competitors and even shareholders.

These cases can be costly, not just in legal fees associated with civil and criminal proceedings, but with settlements. Take the small electronics company that attracted four employees from a larger competitor.

The smaller firm soon began selling products similar to their rivals, but at a lower price, prompting the bigger business to sue the smaller firm and its officers for stealing trade secrets and customer lists. After 2 and 1/2 years, the case was settled for more than 1 million pounds, and defence costs hit 325,000 pounds.

Another instance. After selling a launderette business, the former directors and officers were sued by the new buyer, who claimed false information about its profitability was used to clinch the deal. The buyer demanded that the agreement be scrapped and all losses be reimbursed. Together, the legal fees and settlement reached 475,000 pounds. Sobering thought, especially when a company can't always reimburse its directors and officers for these costs.

No wonder 43% of them want extra protection if their company becomes bankrupt or insolvent.

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Asterisk: 2012 Towers Watson Directors & Officers Liability Survey.

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Having the right coverage isn't just the key to protecting your company, its directors and officers and their assets, it can be critical to attracting and retaining the quality of talent your business demands.

With risks like these, you need an insurance company who can help protect and prepare you for anything. That's why directors and officers liability coverage isn't a maybe, but a must have. Ask your broker how Travelers UK can help ensure your business is protected.

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Logo and text: TRAVELERS. For more information on Directors and Officers coverage, please visit travelers.co.uk/managementliability.

The information provided in this video is intended for use as a guideline and is not intended as, nor does it constitute, legal or professional advice. Travelers does not warrant that adherence to, or compliance with, any recommendations, best practices, checklists, or guidelines will result in a particular outcome. Travelers does not warrant that the information in this video constitutes a complete and finite list of each and every item or procedure related to the topics or issues referenced herein. Furthermore, laws, regulations, standards or codes may change from time to time and you should always refer to the most current requirements and take specific advice when dealing with specific situations. In no event will The Travelers Companies, Inc. or any of its subsidiaries or affiliates be liable in tort or in contract to anyone who has access to or uses this information. Copyright 2016 Travelers Management Limited. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the US and other countries.