2nd May 2019

Why a Motor Trader should have Directors & Officers’ insurance

Guys in motor workshop with clipboard

If you’re a director of a motor trade business, you might want to consider Directors and Officers’ insurance.

This is because a director’s decisions and actions can result in losses for the company or a third party, and he or she can be held personally liable. Even just the costs of defending a claim in court could take a huge financial toll.

That is why we recommend D&O cover, especially if you have several employees. The cover, also called Management Liability, will provide personal asset protection for you and balance sheet protection for your company.

Why might you need D&O cover?

The most common claim against a D&O policy for a motor trader is employment practices. This is usually a disgruntled employee who brings action against their employer/former employer for unfair dismissal, failure to promote or discrimination in the workplace.

Others include legislative breaches such as failure to adhere to the Companies Act or the Health & Safety Act, among others, or alleged financial mismanagement of the company.

Who can bring an action against a director or officer?

  • Shareholders
  • Employees, past and present
  • Your customers
  • Creditors
  • Other directors
  • Competitors
  • Suppliers

As you can see, that list is made up of pretty much everyone a motor trade business interacts with.

If you’re concerned about your exposure as a director, please call the Motor Trade team on 01732 872899 or email [email protected]