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The most prudent Director⁄Officer can make decisions (in good faith) which prove later to be ill-judged or flawed. However, ignorance is no defence in UK law.

Directors and Officers of all companies, including Residential Management Companies, should be aware that they could potentially face unlimited personal liability without the kind of protection offered by this type of very affordable insurance cover.

Although the position as a director or officer of a Residents' Management Company is usually on a voluntary basis, for no benefit to yourself, the law recognises no difference between people running a Residents' Management Company and those running a large Public Company. Directors can be held personally liable for the consequences of their actions, errors and omissions.

Managing a building is a time consuming task, even with the assistance of professional property managers, and anyone prepared to put in the time and effort deserves a minimum of the reasonable protection afforded by this insurance.

What could go wrong?

• A director could be held liable because the value of another lessee's flat had fallen due to the effects of a failure to identify and rectify external dilapidation.
• A lessee might hold a director responsible for the poor workmanship of contractors paid for out of the service charge fund.
• A third party might sue as the result of a defamatory remark inadvertently made by someone in the capacity of director.

It could prove difficult or even impossible to recruit suitably skilled and experienced people as directors of a residents' management company because they are unwilling to accept the potential personal liability.

Cover is provided for breach of duty, trust or contract, neglectful, misleading statement, wrongful trading or wrongful acts or omissions.

What is covered?

• Legal defence costs
• Consequential loss
• Damages awarded against a director
• Out of Court settlements
• Claimants costs and expense
• Legal advice
• Legal representation

Is cover available where Ferndale does not currently arrange buildings insurance?

Yes, it certainly is. We can cover for Directors and Officers of an individual property or large portfolios.