Over the last several years, UK regulations have expanded the scope of directors and officers (D&O) liability—and that trend shows no signs of stopping, according to a recent survey from international law firm Allen & Overy.
According to the survey, D&Os are exposed to a higher amount of personal liability than ever before. Since the survey began in 2011, D&Os have become personally liable for a variety of new offences, including bribery, corruption and fraud, environmental infractions, and lax health and safety.
As the scope of liability widens for D&Os, the frequency of claims and investigations against them rises as well. In 2017, 36 per cent of UK respondents experienced a claim or investigation that involved D&Os at their company, up from 21 per cent in 2016. For D&Os in financial services, investigations against them jumped from 62 in 2015 to 152 in 2016. This follows a general UK trend, which saw a fourfold increase in D&O claims from 2005 to 2015, according to industry research.
As tougher regulations, such as the GDPR, place more responsibility on businesses, 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:
- Regulatory and other investigations and inquiries
- Risk of data loss
- Criminal and regulatory fines and penalties
- 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. For more information about D&O insurance, contact the professionals at Bollington Insurance Brokers.