Benefits of Membership: Director and officers' liability cover

Benefits of your membership: Directors and Officers' liability cover
As part of your SFHA membership fee, we offer an umbrella policy with RSA, via TL Dallas Insurance. 

What is it?
Directors and officers’ liability (D&O) cover is insurance that offers directors and managers of an organisation protection from claims that may arise from alleged wrongful acts as a result of any actions or decisions they take within the scope of their fiduciary and professional duties as a director or officer. It also covers the legal defence costs in connection with such circumstances or actual claims brought for wrongful acts.

Some examples of risks insured under your SFHA member umbrella D&O policy include:

• reporting errors 

• financial mismanagement  

• governance of the organisation   

• failure to comply with regulations 

• creditor claims 

• shareholder activity 

• health and safety matters, including civil claims made against individual directors/officers. 

• employment practices (EPL) and disputes (but only in respect of claims against individual directors and officers, not the organisation itself for EPL claims) 

Why have D&O premiums increased?
Across all sectors (public/private/third sector) insurers have been applying on average 25–30% rate increases for D&O policies. Some insurers have either increased premiums by 100% or halved the policy limit, to reduce their exposure.  

The primary reasons for this sudden change in market rates have been a spike in claims and defence costs on policies. D&O policies have also historically been priced low for many years under intense competition for market share.
The premium also increases depending on how changes in circumstances affect the market. This can include the rise of defence costs or changes in regulatory practices.
This year, the premiums have also been affected by Covid-19.  

While no increase is welcome, we can advise that, after prolonged discussion with your insurers RSA, the increase on the SFHA members' umbrella policy has been limited to 15%. 

What does SFHA provide?
SFHA provides D&O liability cover for claims brought against member organisations, and individual directors and officers, for alleged wrongful acts.   

Our SFHA members' umbrella cover means that claims will be covered on a first come, first served basis until the limit of the cover has been exhausted for an insurance year.