Section 232 of the UK Companies Act 2006 provides that any provision, whether contained in the Company’s Articles of Association or otherwise, which releases a Company Director from his liability in respect of negligence, default, breach of duty or breach of trust in relation to the Company is void. However, Section 233 states that this does not prevent a Company from purchasing and maintaining insurance for a Director of its Company, or its associated company, against the above listed liabilities.
The Scope Of Directors’ & Officers’ Insurance
Directors’ & Officers’ (D&O) insurance may be purchased and maintained by Companies in order to afford financial protection to Directors and Officers from claims which may arise as a result of decisions they take while carrying out their duties and acting on behalf of the company. The insurance will cover the defence costs and financial losses of such claims.