Markel Changes D&O Policy

by Stewart Douglas

Story link: Markel Changes D&O Policy

Insurer Markel has announced that it is to re-launch is products for Directors’ and Officers’ cover to protect company officials from claims under the new companies’ legislation being released this year.

The firm has decided to refine its policy layout for its D&O cover line in light of several sections under the Companies Act 2006 which place direct responsibility on directors and other company officials for certain acts of the company that give rise to loss, particularly in relation to shareholders.

One of the main provisions of the new act in this regard places directors and officers of the company under a duty to promote its success as a whole, which could inevitably give rise to claims against mistaken directors or mere accidental loss.

As a result, the policy had to be upgraded in terms of its wording, to enable directors and officers the added protection they require for these foreseeable problems to ensure adequate cover under their product.

Additionally, provisions are expected to come into force in April of next year that will increase the directors’ accountability and liability to the company, necessitating further rewording to provide appropriate protection in the event of numerous claims arising from aggrieved shareholders.

The move is seen to be pioneering in the directors’ and officers’ liability market, with many competitors yet to announce ay modifications in light of the new act which will continue to come into force over the next coming months.

A spokesperson from Markel International was today quoted as saying the significant depth of changes brought in by the new act could lead to a massive rise in the number of claims against directors and officers acting outwith, or in contravention to, their duties to the company. As a result, the refined wording of the policy to provide excess covers.