Commercial Property Owners and Business Owners

Importance of both Statutory Liability and Directors & Officers cover working together.

Let's explore the importance of both Statutory Liability and Directors & Officers (D&O) cover working together.

While the responsibilities of property owners and/or business owners may differ in some ways, many of their duties overlap, and both are ultimately responsible for the well-being of visitors or staff using their property space.

Whenever an unfortunate event or loss arises, where people are hurt, injured or worse, investigations from work safe and/or other government agencies are likely to follow.  Breaches of the Health & Safety Act can fall on businesses and/or property owners.

Legal exposure can either be attached to the businesses and/or the property owner, depending on the structure and operations of both entities. The directors (assuming a company-limited liability ownership structure is used) can also be liable.

We have seen situations where clients have a Statutory Liability cover but not necessarily a Directors & Officers Liability policy. If you operate as a company, it’s important you have both policies to be fully insured. Health & Safety breaches are only in part covered by the Statutory Liability policy (the fine itself is not insurable), and reparation costs in most instances require a prosecution. D&O cover can be triggered via the likelihood of exposure (lower bar to a ‘prosecution’). This can be useful where costs are paid to reduce further settlement exposure with subsequent investigations and prosecutions.

We recommend clients have Statutory Liability and D&O cover be taken where possible and for it to be held with the same Insurer. This also helps avoid potential gaps in cover (one Insurer), and reduces far-reaching costs and other issues around the timing of the cover.