Directors and officers 'to face more pressure' - D&O liability insurance

16/09/2009

Written by Neil Pointon

As the economic crisis continues to develop, directors and officers are likely to see the amount of civil cases filed against them increase, it has been suggested.

Such a warning comes as Aviva points to figures from the Insolvency Service revealing some 4,941 compulsory liquidations and creditors' voluntary liquidations were issued during the first three months of 2009, a rise of 56 per cent from the same period of time in 2008.

The insurer suggests that as the downturn sees an increasing number of businesses fail, such professionals will find that insolvency practitioners are looking to make a claim against them for a breach or their duties or wrongful or fraudulent trading in an effort to recoup money that their clients have lost.

Robin Farquhar, head of specialist lines for Aviva, said: "As we become a more litigious society, directors and officers are facing additional pressures as more businesses face closure."

As such, considering directors and officers' (D&O) insurance could be advisable for such professionals as the Aviva representative states that "allegations made against them, whether they are guilty or not, can be costly".

Speaking to Insurance Times in June, Doug Robare, financial and professional lines manager for Zurich, pointed out that the ongoing downturn will only increase the need for firms to have adequate D&O and Professional Indemnity insurance in place and to ensure they have an adequate risk management strategy.

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PYV are one of the UK's leading providers of professional indemnity insurance. This news article has been produced by Adfero in collaboration with PYV and its unauthorised use is not permitted.

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