Could your business cope with unexpected legal costs? If you’re running your own business, as well as your day-to-day job, you probably have to deal
As a director of a limited company are you financially liable for the decisions you make?
Safety at work, working from home, employment law, contract disputes, Covid, inflationary pressures… the risk environment for company directors is expanding. Directors of limited companies need to protect themselves and reduce the risk of personal financial loss.
Looking ahead in 2023, we identify five of the well-known and emerging risks businesses face. As an employer, have you considered how your organisation addresses the following issues and how the business can minimise the chance of a problem arising?
Cyber-crime— Data breaches and cyber-incidents can lead to severe losses for an organisation, but the fallout can result in even further damage. Directors and officers may be blamed for not ensuring that proper cybersecurity measures were taken, and may be targeted by those seeking compensation. Organisations should prioritise cyber-security precautions, such as backing up important information, monitoring internal networks and regularly training employees on how to recognise phishing and social engineering tactics.
Workplace misconduct— Bullying, harassment and misconduct are a liability for employers. Colleagues today take workplace misconduct seriously and are less willing to tolerate bullying or harassment. If a worker becomes a victim of unacceptable workplace behaviour— whether the source be a superior or a colleague— directors and officers may face prosecution for failing to provide employees with a safe working environment.
Environmental issues— Concerns about climate change have increased in recent years. Organisations and their leaders may be at risk of facing a claim if they are suspected of contributing to global warming or causing an environmental incident. Leaders must be sure that their organisation complies with any climate-related regulations or requirements.
Lack of diversity—Senior leadership teams have been held increasingly accountable for their failures by shareholders, stakeholders and the general public. Specifically, organisations’ diversity and inclusion practices have been the subject of high level scrutiny. Activists against systemic racism have become more vocal in promoting equal opportunities for people of all races, genders, religions and orientations. Furthermore, UK employers with over 250 employees are now required to report gender pay gap information. Employers and their leaders should prioritise equality, diversity and inclusivity in the future.
Insolvency— With many experts predicting that the UK economy will struggle in 2023, insolvency may become a more frequent issue, which could result in claims being filed while plaintiffs attempt to recoup losses from directors.
Business leaders juggle multiple risks on a daily basis. Ensuring you understand the risks you face will enable you to mitigate, manage and transfer those risks, allowing your business to grow and prosper with the confidence robust protection brings.
To understand more about Directors & Officers cover, talk to the NAPIT Insurance team today.