In the UK, Directors’ and Officers’ (D&Os) of tour operators are responsible for ensuring legal and regulatory compliance. Whilst limited liability can help protect individuals from personal liability, situations can arise in exceptional circumstances when the corporate veil is lifted, and that protection is lost.
Such liability may arise, for example, when directors breach their statutory duties under the Companies Act 2006. Examples of circumstances include failing to act in good faith, exercising reasonable care, or avoiding conflicts of interest. It can also include claims of wrongful trading when a company is, in effect, insolvent.
However, given the public-facing nature of a travel company, its directors may face greater potential exposure than many others. Claims or misrepresentations in brochures and advertising materials that result in misleading information can expose individuals and the company to legal or regulatory claims.
Given the complex regulatory environment of the travel sector and the wide range of goods and services supplied to the public, often globally, directors’ decisions can have far‑reaching consequences. In exceptional circumstances, breaches of health and safety legislation or serious failings could even result in the corporate veil being lifted, and in the worst cases, lead to allegations such as gross negligence manslaughter. Investigations can also incur substantial legal and administrative costs, even when directors are ultimately cleared of wrongdoing.
Directors’ and Officers’ (D&O) insurance helps provide financial protection against legal costs, damages, and investigation expenses arising from alleged wrongful acts. For tour operators, it ensures that leadership can make informed, strategic decisions without the constant fear of personal financial loss, safeguarding both individual confidence and corporate stability.
For further information on how Directors’ and Officers’ Insurance may benefit you, please contact Alan Pattison at Travel Risk Professionals – alan.pattison@jensten.co.uk