Directors and Officers Insurance Quotes
Directors and officers liability insurance can cover the cost of claims against your company’s directors and key managers for alleged wrongful acts, which include everything from breach of trust to negligence claims. But how much should you be paying for it?
In this guide, we will explain how much directors and officers liability insurance typically costs, what kind of rates are available and how to get the best deals on the market.
The following topics are covered below…
How much does directors and officers liability insurance cost?
Directors and officers liability insurance is usually sold through specialist brokers and they will calculate the cost based on a number of factors. These include…
- The type of work you do
- How long you’ve been in your post
- The industry you trade in
- Your revenue
- Your previous loss history
A broker will use these variables to determine the level of risk they’d be taking on by offering you insurance. Of the above factors listed, evidencing strong revenue and net profitability is often the most crucial factor when it comes to securing favourable terms.
The insurance premium you end up with will be calculated based on your company’s needs and circumstances. It will be a bespoke amount, which is why it’s difficult to give a ballpark cost for directors and officers insurance. The insurer will calculate a base rate per million of liability purchased, based also on the level of risk and your company’s requirements.
Most underwriters will want to review your latest financial statements from Companies House to check for any negative trends and assess the firm’s likelihood of failure.
Another key factor in determining the cost of your policy is the sector you trade in. Claims are more common in some industries than others. For example, agriculture and entertainment are considered low risk, while biotechnology and pharmaceuticals are classed as high.
Since there are so many factors to consider when calculating a directors and officers liability insurance quote, applying through an insurance broker is highly recommended. They can help you find a policy tailored to your firm’s needs and budget and negotiate the best deal.
Are there low-cost policies available?
Low-cost policies are available for certain types of business, such as Right to Manage (RMC) companies, and they start at just a few pounds per month, or even a few pounds a year. Keep in mind, though, that the cheapest deals might not offer the level of cover you need.
Make an enquiry and we’ll introduce you to an insurance broker who arranges directors and officers liability cover for small businesses every day.
Directors and officers insurance example quote
Since directors and officers insurance quotes are always calculated on a bespoke basis, the only way to get an accurate idea of how much it will cost is to talk to a broker. For example purposes only, we have included a sample quote below and detailed how it was worked out.
Companies typically base the amount of cover they purchase on their turnover. A firm with less than £1 million in turnover would usually need no more than a £1 million in cover. For firms with less than £5 million turnover, £2 million is a typical limit, while businesses with less than £50 million limit at £5 million. Anything over that would usually be capped at £10 million.
Based on these averages, a company with a turnover of between £250,000 and £1 million would generally need an indemnity limit of £1 million. For £1 million worth of corporate liability cover the premiums starts at £225 plus 12% insurance premium tax (IPT).
Quotes can vary depending on whether any add-ons are included. For instance, including £500,000’s worth of employment practises liability insurance – which protects against allegations of ageism, sexism, racism, sexual harassment, wrongful termination and other violations of employment law – would see the premiums rise to £250 plus 12% IPT.
These premiums could also rise depending on the risk factors discussed in the previous section. For bespoke quotes based on your business’s circumstances and requirements, make an enquiry and we’ll introduce you to a specialist broker who can find you the right level of protection at a competitive price.
Can I get a quote online?
There are online calculator tools and comparison services you can use to get a rough idea of the directors and officers insurance quotes available, but these should be used for estimates only. These tools are not bespoke to your business and are unlikely to be whole-of-market.
If online is your preferred channel, we can match you with a broker who is happy to provide quotes via email and handle the bulk of your application through online communication.
How do I get the best rates?
The best way to get favourable rates on a directors and officers insurance policy is to apply through a specialist insurance broker, like the ones we work with. These are often complex products and many factors are taken into consideration when an insurer is compiling a quote.
Not only can a broker dispel the complexity around these insurance plans, they can help you find the right cover for your company, based on its circumstances, requirements and budget.
Searching the market alone comes with the risk of ending up under or over-insured and going direct to an insurance provider means you will only have access to their products. Many providers won’t even let you take out their directors insurance products without using an expert broker. This is due to the fact that they need to protect their risk when selling insurance of this nature.
Speak to an expert
The whole-of-market insurance brokers we work with are experts when it comes to directors and officers liability insurance, and they can help you find the most suitable policy to fit your business’s needs, with the most favourable terms and premiums.
Call 0808 189 0463 or make an enquiry and we’ll match you with an expert for a free, no-obligation chat about your company’s insurance needs.