Corporate Legal Liability

Why do you need it

The company is a body corporate and is a separate legal entity capable of suing and being sued – Directors and Officers (D&O) owe their duties to the company, but in some circumstances the “veil of incorporation” can be pierced by their actions.

Corporate Legal Liability (CLL) cover protects a company from claims made for ‘wrongful acts’. This could be anything from a breach of contract to copyright infringement or other intellectual property. The introduction of the Corporate Manslaughter and Corporate Homicide Act 2007 has also put a spotlight on CLL insurance.

Similar to a D&O policy, claims can be brought by a variety of parties:

  • business partners (vendors and suppliers)
  • competitors
  • consumer groups
  • customers
  • employees
  • government enforcement / regulatory groups
  • investors
  • lenders
  • owners
  • shareholders

What we do

The CLL module is available to be purchased when taking out a D&O policy through us.

What is covered

The core purpose of a CLL policy is to provide financial protection for the company against the consequences of actual or alleged "wrongful acts". The CLL policy will pay for:

  • Defence costs (legal fees)
  • Defence costs for Criminal Actions (up until the point of final adjudication)
  • Investigation costs - FCA / HSE / Inland Revenue
  • Awards, judgements & settlements

CLL insurance is provided on a claims-made basis. This means that claims are only covered if they are made while the policy is in effect or within a contractually agreed extended reporting period, irrespective of when the event giving rise to the claim occurred.

Limits & Policy

Limits up to 50% of the D&O limit
Access to a dedicated legal helpline to assist with legal issues

Generous Additional Policy Benefits, including:

  • Attendance Compensation
  • Corporate Manslaughter
  • Health and Safety Investigation
  • Defence costs carve-back for Contractual Liability

Feel free to contact us or pick up the phone to see how Plus Risk can assist you and your clients.

Claims Examples

Health & Safety Executive

An employee is involved in a fatal accident at work. The Health & Safety Executive and the heirs to the employee’s estate bring legal action against the Company and the Directors personally for compensatory damages.

Environmental Prosecution

A company is prosecuted following an accidental breach of regulations concerning a protected wetland site. No damage is identified and there is no finding of a deliberate contravention or motivation to save costs. The court finds the breach could have been prevented by a robust environmental compliance program.

Routine Visit

Following a routine Health & Safety Executive visit, the company is asked to produce its health and safety accident book for inspection. The records are found to be incomplete, and personal employee data has not been kept confidential. The company is prosecuted and found guilty under the Health and Safety at Work Act 1975 and the Data Protection Act 1998.