Whilst the full ramifications of the FCA being forced to discontinue its proceedings against the former directors of ISoft are yet to become clear, the case has thrown up a salutary warning to the business community.
In what is sadly a not uncommon occurrence, the insurer withdrew funding from their insured with seemingly ruinous consequences for the individuals concerned notwithstanding that they were ultimately not convicted of any wrongdoing.
Anecdotal evidence suggests that some insurance providers are worse than others when it comes to honouring the cover their insured believed had been provided.
Given the increased exposure that business has to criminal and regulatory investigations and/or prosecutions, executives should urgently review their D&O policies (Directors’ and Officers’ liability Insurance policies) to ensure they are fit for purpose. It may also now be prudent to research whether their providers are acquiring a track record of failing to cover costs when proceedings are commenced.
To read the full article which featured in today's Financial Times please click here 'Call to reform directors’ insurance as iSoft four left with bill'. You will need to log into the FT website to view the full article.
Read more about FCA Regulatory & Criminal Investigations.