The Difference Between Directors and Officers and Professional Indemnity Insurance

A common question asked by client’s is what is the difference between Directors’ and Officers’ (D&O but also known as Management Liability) Insurance and Professional Indemnity Insurance (PI).

In short;

• Directors & Officers covers the management decisions.

• Professional Indemnity covers errors and omission in the business you are in.

For instance, if an accountant or advisor gave bad advice leading to a large financial loss, this would fall under Professional Indemnity Insurance. Subsequently the board of directors may be sued for hiring/ failing to supervise the individual who gave the advice – that’s Directors & Officers Insurance.

Its important to remember that in litigation, insurance claims can be multi-tiered and will not necessarily be aimed just at an individual but also potentially the entity and its directors, partners etc which is why we would always recommend that businesses hold Professional Indemnity and Directors & Officers Insurance.

One thing not always appreciated by businesses about Directors & Officer insurance is that such policies can cover not just the directors and officers (as the name implies). It also covers the managers, or any one in a position of power and the corporate entity itself, in respect of its own liabilities.

Did you know?

Insurers estimates that the take up of Directors & Officers Insurance in the UK as little as 10-26% between SME’s and micro SME’S.

For many policies in the market place the average premiums are starting at £150 -£250 per year which when considering the risks of actions under Corporate Manslaughter, GDPR or regulatory breaches, could your business afford not have it.

If you would like to discuss a Professional Indemnity or Directors & Officers Insurance quotation for your business call one of our advisors on 01732 252 898. We are able to help the following industries to name a few:

• Accountancy
• Recruitment
• Construction
• Manufacturing
• Technology
• Banking and Finance
• Surveying
• Architecture and Engineering