Claims against Directors' & Officers' (D&O) insurance may be reduced by employing common sense, it has been advised.

Data protection consultant Alasdair Warwood suggests that a sensible approach to security frequently leads naturally to compliance with regulations.

"Think about the sensitivity of personal information and what's the common sense way of ensuring its accuracy and protecting it," he urges.

"Then you're going a long way to complying with data protection principles, even if you don't know it."

Mr Warwood adds that smaller businesses frequently have fewer resources to devote to complying with regulation such as the Data Protection Act.

The Department for Work and Pensions notes that D&O cover will generally pay costs associated with defending a breach of the act.

But firms are reminded by the department that if an incidence of non-compliance is determined to have been deliberate, legal costs associated with the case will not be covered.