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Directors and Officers Liability Insurance

Do I need Directors and Officers liability insurance?


The cover protects the Directors and Officers of Right To Manage companies or residents associations. It will be individuals that administer and make decisions for their block of flats. They are usually unpaid volunteers that administer and make decisions that relate to the running of their flat block. These often include decisions on maintenance issues, planning permissions and company bank accounts. As well as parking, noise disputes and even on occasions how to interpret leases. They are not limited to these items as their roles can be wide-ranging. They also have further judiciary and statutory duties much like a Director of any other company.
If a director or officer makes a decision that causes a financial loss. Those Directors and officers may find themselves being personally sued by a resident of the block of flats or a third party. It is rare but it does happen.

Do I need to take out additional insurance?


It is totally a personal matter. Some policies will already have a level of cover within them. Therefore it may not be necessary to take out an additional policy. A Directors and Officers liability policy will provide protection for the legal liability of individual Directors and officers. In respect to claims for financial losses by residents or third parties.
It is for contesting errors or omissions only. Those that are made by the Directors and Officers of the Right To Manage company or residents association. The policy is solely for the Directors and Officers. To protect them in the same way that a firm of solicitors would have professional indemnity insurance to protect themselves.
If the company or residents association use a managing agent then they may not need Directors and Officers cover. This is because the managing agent may take responsibility and liability for the day to day management.
In these increasingly contestable times accidents can lead to injuries which can then lead to liability claims. Making the need for Directors and Officers cover more apparent than ever. So it is always best to check whether you have the cover or not.

Can I be personally sued?


Yes. Directors and officers liability insurance can seem expensive because claims are rare. However, when they do happen they can be very expensive. It is important to consider the potential saving in the case of a claim. As instructing a solicitor, even for an error or omission of a previous director can be very expensive. As the liability can be personally directed there are big potential downfalls.



It is easy to overlook the importance of Directors and Officers liability but it can be vital if the need arises. The truth is that the individuals that volunteer for those positions are taking on a big responsibility. One that will affect the lives of everyone else that lives in the flat block. Therefore the potential financial liability is huge.

If you would like to discuss any of the above then request a call back to discuss your options. We can provide a separate policy or include the cover in a building insurance quote.

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01273 827090

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