Growing number of risks facing directors & officers
Over the past several years, UK regulations have expanded the scope of directors' and officers' (D&O) liability and this trend doesn’t seem to be changing anytime soon according to a recent survey by the international law firm Allen & Overy.
Directors of businesses are exposed to a higher level of personal liability than ever before. Some of the offences that D&Os have become liable for in the past 6 years include; bribery, corruption and fraud, environmental infractions and lax health and safety.
With this widened scope of liability has come an increase in the number of claims and investigations against D&Os. To illustrate this point, from 2005 to 2015 there was a fourfold increase in the number of D&O claims.
Following new guidelines from the Sentencing Council in February 2016, the number of Health and Safety prosecutions against directors, excluding all the other D&O claims, tripled.
The top 20 claims in 2016 against directors for health and safety offences totalled £38.6 million! As tougher regulations, such as the GDPR, place more responsibility on business, D&Os could be held personally liable for failing to prioritise compliance at their organisations. These fears are reflected in the survey’s top five risks facing directors, which include the following:
1. Regulatory and other investigations and inquiries
2. Cyber-attacks
3. Risk of data loss
4. Criminal and regulatory fines and penalties
5. Concerns in a post-Brexit landscape
In order to safeguard your business along with your directors and officers, it is essential that you purchase a comprehensive D&O insurance policy. To find out more, contact us on 01202 754900.