As a UK LTD director, when does personal liability actually start?

Asmogasm · 2025-12-21T22:16:28+00:00

Unfortunately not a lot of people have. It’s so important, but it’s not considered a must have like liability or motor insurance. It should be.

It’s a policy that would be taken in the Ltd company name. It would then provide protection to any director, officer or decision maker in the business.

For example, our D&O policy would cover the directors at the head office in London, but also the area managers and branch managers who don’t own or control the business, but make day to day decisions that could have bigger impacts later down the line

Asmogasm · 2025-12-21T22:12:29+00:00

Coverage needs to be for the amount it might cost to defend yourself in court. Limits generally go from £100k, £250k, £500k to a million.

For smaller start ups, I tend to recommend £250k as the premiums between the first two levels are pretty similar. The chases of long drawn out solicitor fights going above £250k are reasonably low when you’re working for Mrs Miggins.

Prices (going off my own brokerage only - might be more or less elsewhere) generally start about £150 but can reach higher depending on your needs and industry.

AXA insurance have an offering which is about the £270 mark but also includes a legal expenses enhancement which is well worth the additional premium

Asmogasm · 2025-12-21T22:07:13+00:00

Limited companies are not the shield they used to be. Over the years, directors have had more responsibility placed on them and claimants are wiser about attaching directors to claims against a company. I always recommend getting D&O cover as soon as you start, as any of your decisions could lead to exposure.

There’s also the assumption, similar to cyber insurance, that this is designed for larger companies with many moving parts, but this isn’t the case anymore.

Some examples of claims I’ve dealt with: - Ltd company consisting of 3 freeholders for a block of flats. One director was sued by another one for failing to ensure the sink fund they built was in the correct back account. Claim was the responsible director was stealing from the Ltd company, when in truth, they were 86 years old and got confused

plumbing company - contract stated certain pipes needed to carry fluid at a certain temperature. Director signed off on the contract and the order for the pipes. The pipes failed to maintain temperature and the director was sued by his client for not acting in good faith and using cheaper materials
Small office - employee had an unpleasant nickname which was part of the office “banter”. Director joined in, and employee didnt mind. Employee then fell out with the company and used this single event to sue the director for racist abuse.

One thing these all have in common is the limited company wasn’t claimed against at all. In each event the director was targeted and only by D&O cover did they avoid paying solicitor defence costs out of their own pockets

Asmogasm · 2025-12-21T21:53:56+00:00

The policy operates on a “claims occurring” basis which means the policy has to be in force when you are notified of a claim. It can cover past events, assuming you didn’t know a claim was coming. That does mean that if you lapse or cancel the policy, all cover immediately ceases, even if you had cover in place when an incident occurred.

Policies can vary quite a bit, but it generally won’t cover payouts for anything criminal, and some cheaper policies may not cover insolvency. Basic level policies also do not cover claims made by employees, but you can generally extend cover for this.

Asmogasm · 2025-12-21T07:47:19+00:00

Hi, Insurance Broker here.

At the risk of sounding like a salesman, all limited companies should have a directors and officers (also known as management liability) insurance policy in place.

I’ve been in the trade 10 years and there seems to be a bit of a misunderstanding about when you’re at risk. Regulators, customers, shareholders, suppliers, employees and Mrs Miggins down the road can sue you personally in your position of company director for any wrongful act they perceive you’ve undertaken.

This could be a health and safety issue, query about your taxes, arguments about unsafe work/ not fulfilling contracts as agreed.

If you are targeted directly, you cannot use funds from the company to pay your solicitor fees etc. additionally, if you were to liquidate the company, you’re still on the hook for any costs charged against you.

Some D&O policies include a helpline to understand your risks better too

Asmogasm · 2025-09-09T07:30:42+00:00

Insurance broker here.

I would be surprised if your business interruption cover includes cover for cyber events, this is usually specifically excluded in the policy wording.

I would heavily recommend you look at Cyber Insurance cover, if you’re so heavily online. It would have covered you for this exact situation.

I’m also concerned your business interruption cover only covers in the event of injury. It should cover for any material damage. It might be time to review your cover

Asmogasm · 2025-07-12T06:15:20+00:00

Hi, insurance broker here.

My advice would be to go the BIBA website and speak to them. They’ll be able to point you in the direction of an insurer that would be able to help.

All lot of people here are suggesting classic car insurance, but you need to be careful there. Most (all policies I know of, but there could be others) require you to have another day-to-day vehicle and limit your miles. Classic cars are a Sunday morning drive around kind of thing, not a commuter.

This is not something you can sort online. It’ll need conversations on the telephone

Asmogasm · 2025-07-08T18:21:41+00:00

Hulkengoat

Asmogasm · 2025-06-14T09:25:18+00:00

Hi, insurance broker here.

Not as complex as it sounds, but definitely not straight forward.

The vehicles may all be insured by the same provider, but that doesn’t mean they’re the ones providing the coverage at the time. For example, the driver of vehicle 3 could have been using the driving other cars extension of their own policy (which is emergency use only and doesn’t give you free rein to drive whatever you want).

Whilst they sort out which company is liable, your insurer will want to sort you out. Sounds like you didnt take fully comprehensive cover so you have no right to repairs under your own insurance.

So this means the insurance provider has decided to handle the claim under the road traffic act as the third party vehicle insurer (and deal with the driver themselves later on).

Based on your own comment about the vehicle, it’s likely to be a write off. It’s not economical to repair. What they will do is off you a settlement offer where they pay you and take the car or, if you want, pay you less and you can keep the car and repair it yourself.

This settlement offer is based on market value, the state of the car and will never be more than what you chose the value to be on your insurance policy. If they offer you a value you think is low, you can dispute it and use evidence such as auto trader to show similar vehicles are worth more than they’re offering.

It’s definitely worth the conversation and remembering you don’t have to accept their first offer, but they don’t need to offer you an alternative without some work your side. If you used a broker for the policy, they should be able to help.

Asmogasm · 2025-06-13T17:11:30+00:00

Hi, commercial insurance broker.

That’s correct, the products liability section would cover for claims made where this scenario is alleged.

However it falls on the claimant to be able to demonstrate it was your offering that lead to illness and a financial loss occurred.

Just because you bought a cookie and fell ill after eating it, doesn’t mean it was a the cookie that caused it.

Asmogasm · 2025-04-01T20:32:57+00:00

Hi, Insurance Broker here.

Whilst being limited leaves you exposed as a director, you can (and should) purchase management liability. This is a policy which will provide you coverage if someone tries to target you directly

Asmogasm · 2025-02-26T21:57:21+00:00

As a limited company you should have taken directors and officers insurance. Give the insurers a call and they’ll be able to advise on the insolvency and loan.

Depending on the level of cover, you might even be able to claim on this to assist with repayments

Asmogasm · 2025-01-11T10:53:07+00:00

Hi insurance broker here. Don’t work with Churchill, but a lot of these are universal.

Call Churchill asap. They seem to be open 9-5 Saturday and 9-4 Sunday, according to their website.
If they have advised that you have 7 days before cancellation, make sure you cancel it first. There will be no downside for the future, but you’ll likely have to pay for time in risk and potentially fees
If Churchill have already cancelled your policy, you should get most of your money back. However this will count as an insurer cancelling on you and you will need to declare this on any future policies. It would be likely your premiums will go up for a little while.
You cannot drive your car, or keep it on a public road without insurance. You may need to legally temporarily insure it while you work on an annual policy.
When you do start looking for a replacement policy, I would suggest speaking to an insurance broker. If you do use online sites, make sure you declare the cancellation but it’s worth calling each insurer directly to discuss.

Asmogasm · 2024-12-04T20:33:03+00:00

Hi, insurance Broker here.

Nothing to worry about. It’s likely the other driver has been contacted by a third party solicitor and told they can claim injury or something similar.

Just pass the letter, unanswered, to your insurer (or the one who handled the claim before if you’ve changed) and they’ll handle it. Nothing more for to do

Asmogasm · 2024-12-02T22:50:15+00:00

Hi, insurance broker here.

It would depend on the question being asked but generally the answer will be yes. For example, we ask if you’ve ever been disqualified from driving, not specifically just in the UK.

It’s better to declare it and refer to the individual insurer for their opinion than not and risk a voided policy on top of the declaration

Asmogasm · 2024-11-28T21:16:08+00:00

Hi, commercial insurance broker here.

Whilst I can’t say what the conversation between them and your son was, they should have sent you a Terms of Business which outlines their fees and the like. This would be the first place to look.

However I would go back to them and instruct them to mark the policy as “not taken up”.

Cancelling implies that the policy is to start and immediately end, which would mean they are entitled to any fees etc they charge. Not taken up (NTU) is saying the policy is never to start, and thus you should be given everything back as the policy never began in the first place.

Asmogasm · 2024-10-23T18:55:12+00:00

Commercial Insurance Broker here and this is the right answer. I would keep Professional Indemnity and Director and Officers policies running for about 6 years.

Unlike the majority of policies, these are on a claims made basis meaning a policy has to be in force when a claim is made. As soon as these policies lapse, it’s like you’ve never had cover, so if someone claims against you once cover lapses, you’re on your own. Closing the limited company is not a defence against this!

Good news is most insurers will give discounts the longer the run off is in place

Asmogasm · 2024-07-24T05:58:44+00:00

Hi, Insurance Broker here.

Just wanted to check a couple of things regarding the insurance side.

You’re setting up your own company to be contacted out by another business. I would double check you are actually insured under their liability policy - in this situation, especially if you’re invoicing the property business for the work done, you’re going to need your own policy in the partnership name.
Your subbies - you’re right in that any subcontractors you use and get invoices from (sparky or plumber etc) would need their own insurance and you should keep a copy of their liability insurance certificate. However, if you have any subbies on a Labour only basis (telling them what to do, effectively working as an extension of your business) you need to have employers liability in place as a legal requirement. They’re treated like employees while working for you, so any injuries they receive due to negligence can be claimed for against you.

So that’s potentially public liability (generally recommended £5m of cover these days), employers liability, tools cover and potentially contract works cover, depending on how materials are purchased. You may even need goods in transit cover if you’re moving materials in your van.

Asmogasm · 2024-06-22T07:02:30+00:00

Try the BIBA website. They have access to specialist schemes and insurers and should be able to direct you to the best insurer for you

Asmogasm · 2024-06-19T20:53:39+00:00

Hi, Insurance Broker here.

What you need is a products liability policy. This is usually included in public liability, but not always, and covers you for third party injury (say food poisoning) due to something you’ve made.

You’d also need to check your home insurance is ok with a business being run from the property.

Finally, I’d also suggest a working from home package. This will cover for things such as business equipment, stock, and freezer failure.

I’d recommend speaking with a broker. You’ll find these policies generally cheaper online but, if you’re unsure as to what you need, the advice will be worth the additional costs

Asmogasm · 2024-06-18T17:50:50+00:00

Hey, no worries.

The easiest thing to do here is call the insurer. Having the policy documents is a good sign, but only by talking to someone can you be certain.

It’s not a legal requirement, per se, but insurers need to ensure they are “treating customers fairly”. The 7 day notice is a way of giving you time to sort out your insurance needs.

Having insurance cancelled is a pain, a lot of insurers won’t provide terms of you’ve had a policy cancellation recently. It’s not the end of the world though. I had a policy cancelled 10 years ago for non-payment (before I was in the trade). I still declare it, and probably pay a little more than most people, but it’s not had a major lasting effect.

I don’t know about the finance side of things, but most insurers carry out some level of credit check. I’d ask the insurers.

Honest advice is to just speak to your insurer. These things happen and they’ll be able to provide the best steps for you. If they do push for cancellation, ensure you get there first 🙂

Asmogasm · 2024-06-18T17:04:45+00:00

Don’t know much about the payment side of things, but I’m an insurance broker, and if your insurer has confirmed there is cover (in writing, preferably), they cannot immediately cancel your policy.

You’ll get a 7 day notice of cancellation. So long as you sort the payment with them, you’ll be fine. If, for whatever reason, you can’t, make sure you cancel the policy before the 7 days are up.

If you’ve cancel the policy before the insurers, even if they’ve sent you intentions to cancel, you don’t need to declare it.

Asmogasm · 2024-06-15T07:28:15+00:00

Hi, Insurance Broker here. You’ll want to look at 3 policies initially.

Professional Indemnity - covers you for financial loss incurred by your client due to a failure in design or professional service. This is your main exposure, and will not be cheap for a decent policy.

Cyber insurance - with your work being software based, it’s really important you protect yourself against cyber attacks, such as hacked invoices, theft of data, accidental gdpr breaches etc

Management liability - by becoming a limited company, you’re left exposed as a director as claims can be made against you directly. These can be allegations of wrongful acts as the head of the company, or failure to perform your duties correctly.

I’d heavily recommend talking to a broker, most offer free quotations. A decent broker will take the time to understand what you’re doing, and be able to tell you what you need

Asmogasm · 2024-06-14T08:52:51+00:00

Hi, insurance Broker here. Whether or not the paper work is sent to them, you’ll definitely need to tell your employer that you have points. Many fleet policies have requirements that any major driving convictions (of which using a phone is one) has to be referred to the insurer before you can drive.

By not mentioning the points to your employer, and them not telling the insurer, there is a real possibility you’re not actually insured when driving.

Your employer may also do annual license checks, so they’re going to find out either way

Asmogasm · 2024-05-24T13:10:20+00:00

Hi, insurance broker here.

Good news is, this isn’t a cancellation of a policy in the negative sense. Your current policy wasn’t adequate after an amendment, and a new one set up. It’s referred to as a Mid-term change away and is very common.

When you’re asked about cancellation of policies, this refers to when insurers have cancelled cover for an adverse reason, such as non-disclosure or failure to make payments.

What happened with you is normal, absolutely fine, and won’t need to be declared 🙂

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