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daveeeeeed daveeeeeed is offline
Join Date: Oct 2004
Location: London, UK
Posts: 25
Director's Liability Insurance

Hope this topic hasnt already been dealt with on this forum (can't find it via the search).

Does anyone have any advice about whether we should bother getting director's liability insurance?

My company has three directors, and we are setting up to be a retailer of high-end consumer electronics. We will not hold stock ourselves and have arranged direct-shipping supply relationships with reputable national distributors reccommended by our manufacturers.

We dont have any employees at this stage and work from a domestic premises protected by the owner's home contents insurance package. The main risk we have identified is if a product we sell were to damage or injure property or person - however despite taking legal soundings I am still unsure whether the manufacturer would be liable if sued, or we directors.

Insurance will undoubtedly work out as a high overhead.

Anyone got any thoughts?
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Netcomm UK Netcomm UK is offline
Join Date: Nov 2003
Posts: 549
Never heard of Directors Liability Insurance. Do you mean Public Liability Insurance?

I believe if you are a LTD company you need to have this by Law. Check that out on Google with an insurers website. Should tell you. I don't think that would cover what you're talking about though, or need to cover it.

If the buyer has the goods delivered and deals with them themselves, like fixing to wall or changing a plug and wiring it wrongly, that would be their fault not yours. PLI would cover our company, for example, if we are installing cables and someone trips over a cable left around, then they would sue us and this would cover it.

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shredder shredder is offline
Join Date: May 2004
Posts: 55
I think you are refering to Directorís Personal Indemnity Insurance

this text from the IOD web site:-

Your companyís liabilities may be limited - but yours are not

With corporate governance in the spotlight, todayís company directors are under constant scrutiny. You may believe your decisions and actions are shielded by your company, but this is not always the case - an increasing number of directors are being personally investigated or pursued in court. Your home, savings, investments, even your career could be under threat as a result.

Can you afford to take the risk?

In the UKís increasingly litigious environment, the need for comprehensive insurance protection has never been greater. The IoD offers members Directorís Personal Indemnity Insurance, provided by Chubb Insurance Company of Europe - a leading provider of specialised insurance programmes for companies and their executives. It is designed to cover executive and non-executive directors and senior management of private companies* for legal actions and their costs, and helps protect personal assets.

see this link:

ps i've this is not a plug for this priduct but the page provides a good description.
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daveeeeeed daveeeeeed is offline
Join Date: Oct 2004
Location: London, UK
Posts: 25
Thanks guys - useful info much appreciated.

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James Smith's Avatar James Smith James Smith is offline
Join Date: Mar 2003
Location: Abingdon, Oxfordshire
Posts: 2,044
In my opinion its overkill so long as your main product is properly insured and you arenít doing anything dodgy in the first place.

Different peopleís attitudes to risk may of course vary. If you hare a million pound company a few hundred pounds thrown at this may be worthwhile, if you have something only worth few a few thousand then there are better ways to spend your money - such as proper legal advice to ensure your contracts are tied up tight to limit any exposure in the first place.
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