AIRMIC D&O Guide Revised

AIRMIC has today released its updated guide to Directors’ and Officers’ insurance, taking into account modern developments in company structure and the form of insurance cover now widely offered to businesses.

The document released today by the Association of Insurance and Risk Managers is a revision of that first published three years ago in 2004, which takes into account rising costs for Directors’ and Officers’ insurance for those companies that choose to seek cover, and the changing face of company law in the UK.

It also reflects advancements in company law brought about by the commencement of the Companies Act 2006, which comes into full force over the course of the next year or so, and radicalises the structure of UK company law, particularly in relation to directors.

With the new legislation, the role and impact of Directors’ and Officers’ insurance cover is redefined, which has brought about this necessary revision to the publication, with increased scope for claims as a result of the changing legal framework.

The guide details the role of insurance to cover Directors’ and Officers’ omissions and errors in the course of their employment, and accounts for failures in the performance of management duties.

The cover is designed to protect those Directors and Officers of the company should they in time become liable through the course of their duties, particularly relevant in light of the growing accountability of directors to shareholders through codification of previously common law responsibilities to the company and its members.

Whilst the move has been described as more of a ‘fine tune’ rather than a ‘radical rewrite’ it has come as the product of requests from members of AIRMIC as an update for companies and their officers for current company law issues, and to make relevant parties aware of the need for adequate, efficient cover for management error scenarios.

Category: Insurance News