.png)
.png)
This insurance protects Directors and Officers from personal liability arising from claims made against them for wrongful acts in the course of their duties. I have noticed an increase in D&O being tagged on to the main care insurance policy that says it covers Directors and Officers related claims.
This issue needs addressing as it leaves care operators vulnerable to litigation and personal financial loss as many of these policies aren’t worth the paper they’re written on.
Care operators often believe they have protection from D&O policies, but the reality is sometimes quite different. The policies are often not sufficient to protect personal assets of Directors and Managerial Staff from the costs and awards associated with defending civil, criminal, and regulatory claims. This is particularly concerning given the increasing litigiousness of our society and the high staff turnover in the care sector. In such circumstances, personal assets of care providers could be at risk, making it crucial for the sector to have comprehensive D&O insurance.
A. Check the exclusions, some of these add on policies exclude regulatory claims. Also if you don’t have corporate legal liability then the entity, that is to say the Limited company, wouldn’t have a policy to respond to a claim.
We’ve recently seen a case where an operator was claimed against under their public liability insurance for incorrect use of lifting equipment. The claim didn’t go anywhere and the care operator were deemed to have no liability in the matter. A year down the line the HSE investigated the operator and judged them to have been in breach and therefore fined the care business.
Since Covid many management liability policies have stripped cover back. It’s important therefore to ensure your policy is still fit for its original purpose and works for the care sector specifically. There are still polies available that provide relevant cover for the sector but many exclude regulatory defence for example which most offering care provision would consider essential. Moreover, opting for policies without EPL cover is something we would not recommend as 80% of claims emanate from this source.
A. Most of these policies will only defend you if the provider deems there to be a 51% or more chance of successfully defending the claim.
If you are a care operator with D&O insurance, it is essential to determine if the policy would respond to any claims that might arise. You can seek the advice of your broker, but it is crucial to remember that some brokers use D&O as a benefit of the policy, which does not provide adequate coverage. A competent broker should provide comprehensive advice on the coverage of the policy and ensure that care operators have sufficient coverage.
While getting D&O insurance is a choice, the care sector's increasingly litigious nature and high staff turnover make it essential to have adequate coverage. Brokers must provide comprehensive coverage that protects care operators from litigation and personal financial loss. Therefore, care operators must select a broker who understands the sector and offers D&O insurance policies that provide comprehensive coverage. It is better to spend a little bit more to get the right cover than to save a few hundred pounds in premiums only to find out that the policy does not provide adequate coverage.
Please feel free to contact me directly, either by email by clicking the ‘contact me’ next to my bio, or call me on 01273 424904 if you are unsure and would like guidance.
.png){kind=small}
