Dave Williams, from Henshalls Insurance Brokers, in Newport and Shrewsbury, said management staff may not be aware of the personal consequences they could face if they failed to meet their responsibilities.
“Business owners will know full well the impact the coronavirus has had on their balance sheet, but directors and managers need to know they could find themselves personally liable if mistakes are made.”
Dave said the potential for claims and court cases against those taking corporate decisions had increased due to the pandemic, particularly if the company was a PLC with shareholder responsibilities.
“To protect your senior staff, it’s vital that you have the right kind of insurance policies in place in case your directors face claims from regulators, shareholders, creditors, employees and other parties.
“Cost cutting may seem tempting in the aftermath of such tough economic times, but cutting corners on your directors and officers insurance makes no sense in the long run – this kind of cover is now more important than ever.
“And if you don’t have this insurance in place, you need to act fast to protect your personal finances and, in the most serious of cases, to help you avoid a possible prison sentence.”
Dave said Covid-19 created a whole new range of circumstances which could lead to difficulties in the workplace.
“You could find your directors accused of failing to exercise a duty of care for their staff maybe through not enforcing social distancing on the premises, or insisting that they travel to work, or by not taking proper care of their needs while they work from home.
“Maybe your company didn’t have adequate business continuity plans in place which could be seen as a failure on the directors’ part to prepare properly, or maybe there has been a data breach because the board didn’t have cyber insurance?
“Directors and officers cover will be crucial if you find your senior staff in the firing line as it should also help if you need to defend them in an expensive legal battle, so don’t ignore your responsibilities as the lockdown eases.”