Directors & Officers Insurance - Overview

There has been an increase in the number of laws assigning personal responsibility to individuals managing companies. This has meant that directors and officers can now be personally sued by shareholders, creditors, customers, competitors, employees and members of the public.

INCREASED PERSONAL RESPONSIBILITY

As individuals & corporations become more aware of their legal rights they are increasingly turning to litigation to recover losses.

INCREASED REGULATIONS

Increased government funding has enabled agencies such as the Australian Securities Commission (ASC) & the Australian Competition & Consumer Commission (ACCC) formerly the Trade Practices Commission (TPC) to actively investigate the affairs of companies & prosecute where appropriate. The cost of legal representation during such matters is significant (regardless of the outcome).

THE BENEFITS OF DIRECTORS & OFFICERS LIABILITY INSURANCE

PERSONAL PROTECTION

Directors & Officers (D&O) Liability Insurance provides personal protection to directors & officers by protecting them against legal liability which they may incur whilst carrying out their duties as a company director or officer.

D & O insurance provides cover for settlements, compensation and/or damages awarded against an insured director or officer. In addition the insurance provides cover for the significant legal costs and other expenses associated with defending legal actions.

The insurance can be arranged only after we receive a fully completed proposal form and relevant information from the prospective insured entity.

INDEPENDENT PROTECTION

When faced with litigation, the directors and officers of a company may or may not be assisted by their company in defending an action. The decision to provide indemnity to a director or officer is often discretionary and in some cases may be prohibited by the company’s Articles of Association.

D & O insurance resolves this problem by providing protection that is independent of any corporate indemnity which may be available. Furthermore, legal action can be expensive and lengthy, D & O insurance can also assist by funding the defence of an action “up front”.

SPECIALISED LEGAL REPRESENTATION

Litigation involving directors and officers is invariably complex and can often involve directors and officers defending their personal reputations. It is imperative that insured’ s have access to specialised and highly qualified legal practitioners who will represent them and protect their interests.

COMPREHENSIVE PROTECTION

The increased responsibilities and regulation faced by today’s company director and officer have highlighted a growing need for a comprehensive insurance product to protect such persons against the personal and financial strain of litigation or prosecution.

Directors & Officers Liability Insurance is a product designed to meet the contemporary needs of clients.

Directors & Officers Liability Insurance affords automatic cover for:

• Civil proceedings
• Successful defence of criminal proceedings
• Trade Practices actions
• Occupational Health & Safety actions
• Official investigations and enquiries
• Employee actions

Directors & Officers Liability Insurance can also be endorsed to include cover for:

• Outside Directorships
• Prospectus liability
• Joint Venture liability
• Pre-acquisition

Directors & Officers Liability Insurance incorporates the following policy features:

• Unlimited retroactive cover
• Advancement of defence costs
• Additional reporting period
• Severability and non-imputation
• Automatic cover for new subsidiaries

These policies can be endorsed to provide an Increased Aggregate Limit of Indemnity, effectively doubling the amount of cover.

We appreciate that directors and officers will take appropriate precautions to minimise their personal liabilities, however potential risks associated with the role of company director and company officer cannot be ignored.

Directors & Officers Liability Insurance provides today’s company director and officer with peace of mind in the knowledge that should they be faced with the prospect of litigation or prosecution, their insurer will afford them every possible assistance and support in protecting their personal assets, their reputation and their business.

Click here for a quote and more information on Directors and Officers Liability Insurance