A further rise in the rate of standard UK Insurance Premium Tax (IPT) was announced yesterday by the Chancellor Philip Hammond in his Autumn Statement. Effective 1st June 2017 the rate of IPT charged on most insurance premiums will increase to 12%.
Organisations and individuals faced a hike in IPT when the government increased the rate from 6% to 9.5% effective 1st Nov 2015. This was increased once more to 10%, which came into effect on the 1st Oct 2016.
With the Companies Act recently having been overhauled, and its imminent introduction into full force, we felt it was time to make the purchase and pricing of Directors and Officers Indemnity and Liability Insurance much more available.
Technology has moved on apace and we were able to launch the new facility from conception to live in less than 48 hours. The result is that we can offer a price comparison across 4 different policy covers. These range from a starter policy for small business to a comprehensive policy including Corporate Liability (entity) insurance and Employment Practices Liability.
You can access the service using this secure link button:
Each Starter small business policy taken out receives a free copy of The Company Directors Manualand CD -ROM published by Indicator® who for more than 8 years have published independent advice on tax, financial, legal, personnel and health and safety issues. This is sent to you in the post within 60 days of purchase. 30 minutes of Free legal advice is also provided on a legal helpline.
With the Standard D&O policies, the same free legal advice is provided but you also receive your free first years subscription (worth £97.00) to The Company Director Tips and Advice Newsletter from Indicator®. This is published 22 times a year.
With the Employment Practices Liability policy, you also receive a one year free subscription (worth £121.00) to Personnel Tips and Advice letter from Indicator®. Again this is published 22 times a year and it keeps you updated on all new legislation, decisions and case law.
Will it happen to me?
You may often have heard the opinion that “as the Company is a limited liability company, that the Directors are protected as the liabilities are limited. Under the Companies act, all Directors, including those who do not hold that title, but are deemed by the law to be ‘Directors’ have unlimited personal liability in a wide range of circumstances. make sure you have valuable protection for defence costs and liability arising from this exposure. The on-line quote system provides cover from £50,000 to £3,000,000 limits of indemnity. Higher limits are available by completing this questionnaire.
Other Development Updates
The Corporate Manslaughter Act
Becomes law in April 2008. It has been described as ground breaking legislation and as a means for victims of corporate failures to obtain justice. The Corporate Manslaughter Act will create a new offence of corporate manslaughter. This means that a company if convicted can face an unlimited fine. Almost all companies, small, medium and large, will be subject to scrutiny by Police and the Health and Safety Executive if a death occurs in the workplace. If a prosecution is brought , Juries may consider any relevant information including the attitude of the Company towards safety.
D&O policies provide valuable protection for the defence and investigation costs arising from the exposure to the determination of Authorities to make it easier to secure successful prosecutions for workplace deaths.
Reigate and Banstead CVS hosted a seminar on 18th May 2007 for Charity Accountants. We were delighted to provide a speaker to discuss the practical issues surrounding the purchase of trustee indemnity insurance.
The Charities Act gained Royal Assent on 8th November 2006 and is due to come into force in early 2007. The Commission have provided a guide to the main provisions on their website. Trustee Indemnity Insurance is specifically mentioned:
Trustee indemnity insurance
Trustee indemnity insurance covers trustees from having to personally pay out when claims are made against them, such as health and safety breaches which cause an employee injury, as long as the mistake was honestly made and not the result of wilful misconduct.
In practice, trustees are not held liable in this way for honest mistakes but anxiety about the possibility may have made people reluctant to become trustees. There was also the issue that the charity’s funds should not be used to pay for insurance which would benefit trustees.
The Act allows trustees to take out trustee indemnity insurance using the charity’s funds without the permission of the Charity Commission, as long as there is no provision in the charity’s governing document which specifically forbids this. If there is a specific prohibition in the charity’s governing document then trustees will need to amend this with the Charity Commission before they can buy trustee indemnity insurance.
Relief from personal liability for trustees
Recruiting new trustees can be made harder if potential trustees are worried they may be personally liable for mistakes they make which put the charity’s assets at risk. Before the Act, only the courts could relieve trustees of this sort of liability.
The Act allows charity trustees to apply to the Charity Commission, as well as the courts, for relief from personal liability for a breach of trust where the trustee has acted honestly and reasonably.
This obviously only applies where mistakes have been honestly made. The Commission and the courts will still take deliberate breaches of trust by trustees very seriously.
Source: Charity Commission website version November 2006 and is reproduced here in accordance with their Copyright Statement.
This is good news for charities. With the general environment being increasingly litigious, charity trustees need to protect themselves against allegations of wrongful acts. Even if there is relief from personal liability for trustees the cost of defending actions may still be there. Trustee indemnity insurance provides defence costs against these allegations of a wrongful act by trustees.
If you wish to discuss any issue with an adviser, please call 08702 412214 or request a call by leaving your contact details here.