Two thirds of small and medium business leaders are not aware of what Directors & Officers Insurance (D&O) is, according to new research by Allianz Insurance.
The poll of 1000 SMEs and Mid Corporate businesses also revealed that more than half of business leaders (54%) said that they did not realise that a company director can be held personally and legally liable for a business decision.
Respondents believed the top three risks which face their business were data security (25%), credit risk (19%) and reputational risks (15%).
When asked specifically about reputational risks, those surveyed said that their biggest concerns were:
• A wrongful act by senior management or director (36%)
• Making a decision which loses money for a client’s business (32%)
• Employment practice claims against senior management or a director (27%)
Stephanie Ogden, Speciality Lines Underwriting Account Manager at Allianz Commercial, confirms, “Despite the lack of awareness revealed by our research, small and medium businesses face the same risks as their larger peers and often, they have further challenges because they do not have an in-house legal team to help manage a claim or investigation against them.”
She adds, “With an increasing focus on regulation and litigation in the UK, we believe that Directors and Officers insurance is a must for a business of any size. It provides valuable access to specialist lawyers and consultants, providing companies and their senior executives with the peace of mind that they can make complex business decisions without the fear of financial and reputational consequences.”
As part of our range of commercial insurance offers, P F Spare Insurance Brokers are able to arrange Directors and Officers Insurance through Allianz’s Complete Directors & Officers product. Please contact us for more information.