Partner and LLP Member Protection
Directors and Officers Liability Insurance for Solicitors
Today’s partnerships, limited or otherwise, and their senior managerial staff, have real exposures not only to their own employees but also to regulators and shareholders of outside companies.
Even unfounded allegations can be expensive and time consuming to defend – not to mention the possibility of associated bad publicity and severe damage to professional reputation.
There is a vast amount of new legislation and regulation that, if not properly addressed, could have serious financial impact on your practice. QPI can offer an insurance product that focuses on the needs of professionals in their managerial capacity. This product compliments existing Professional Indemnity covers and provides real peace of mind for your Practice, knowing that you have protection for unexpected costs associated with investigations and tribunals, not to mention defence costs.
The LLP structure provides many of the benefits of a partnership whilst limiting the individual liability of its members. However, with the creation of the LLP additional liabilities have been created for its members, many of which resemble the liabilities of limited company Directors’ and Officers’. Just as company Directors’ owe a fiduciary duty to the company, members of an LLP owe a duty of care to the LLP and are liable for negligence and other torts if they breach this. Members are also exposed to the provisions of the Companies Act 1985 an are subject to the rules governing fradulent and wrongful trading and disqualification of Directors.
LLP Members are also subject to the Insolvency Act 1986 and in the case of insolvency, if it is proved that they knew, or ought to have known that the Partnership would become insolvent, they face the prospect of having any monies they withdrew from the Partnership clawed back.
Employment Practices Liabilities
Capped damages have been removed for many offences and an increasingly hostile body of law puts the onus on Employers to prove their innocence or face significant financial penalties.
The volume of disputes is rising year on year and high profile cases with high six-figure awards have demonstrated that Partnerships and LLPs are amongst the more at risk. Claims examples include:
A female employee was made redundant two and a half hours after informing a partner that she was pregnant settled for an estimated £250,000. Heard & Fellows v Sinclair Roche & Temperley
An award of £900,000 after testimony that a senior partner had stated that certain female employees should be fired “to get in better looking recruits”. Employment Tribunal Service Annual Report 2004
QPI can provide advice on the appropriate protection for both Members’ of LLP’s and Partners and has devised, with a leading Insurer, a product that indemnifies both the Partners and the Partnership against the costs of defending the claim, the costs of settling the claim and the cost of any award resulting from the claim.
For your peace of mind contact Samantha Hawkins on 01604 712222 or e-mail sam.hawkins@qpilegal.co.uk
QPI….expertise in protecting your Practice you should expect!