Last updated on April 13th, 2015 at 02:18 pm

As  a small business director are you aware that directors and other officers of a small businesses have various duties, responsibilities and powers in connection with their position?

Usually, if they are employed by the company these are set out in a job description or terms of reference, although these may be missing if you are the sole director of your own company unless you have written them for yourself (and not many people in this position would even have thought about writing their own job description – after all, they do what ever needs doing, when ever it needs doing).

Directors can be held responsible for a range of issues including:

• health and safety
• data protection
• maintaining satisfactory accounts
• fraud
• negligence

For example, did you know that directors of a limited liability company (and Ltd Company for example) can be held personally responsible for failures within that firm?  It is a common misconception that directors in a limited liability company are protected from individual actions.  This is not the case, in fact, all directors and those acting as directors have unlimited personal liability in a wide range of circumstances under the Companies Act 2006. This means that ultimately, your personal assets (including your home, savings and any other assets) could be at risk.

Directors’ and Officers’ insurance (D&O) covers  the directors, officers and senior employees  of a company for the personal liability they may incur when allegations are made about their professional conduct. If a director or officer is found to have accidentally acted outside their terms of reference and this results in a claim, compensation and legal fees will be covered by the D&O policy, however if the act was deliberate, then it may not be covered.

D&O insurance can provide cover for a range of issues, including: non-compliance with E.U. directives and regulations, the Data Protection Act, the Disability Discrimination Act, the Companies Act, the Corporate Manslaughter Act,  legislation on health and safety, racial, sexual and age discrimination, consumer protection, merger and acquisitions and much more.