Directors and Officers Liability Insurance – Now there is a way to protect yourself as a company manager!
The reasons why a director can be tried are as many and diverse as the business itself. Based on provisions contained in our current legislation – the Commerce Act, the Law on Obligations and Contracts, the Law on Public Offering of Securities, etc.,
as well as under the Articles of Association of the Company or a Management Contract concluded, directors could be sued by many countries:
- shareholders, according to whom company files were not managed properly;
- investors who believe they have been misled;
- receivership if the company performed transactions while it was in bankruptcy;
- users/clients or the Commission for Consumer Protection
The head of each company bears personal and unlimited financial liability for their actions as Manager and representative of the company, in accordance with the Commerce Act.
At risk is everything he has – housing, savings and pension contributions, and all other personal property.
Negligence and errors may cost a lot, so we recommend you to take out Directors and Officers Liability Insurance. The insurance provides coverage for payment of:
- compensation awarded or out-of-court settlement reached, including legal costs incurred which the insured persons are obligated to pay by virtue of an effective court judgment in relation to their wrongful acts and omissions;
- losses ensuing from administrative fines and penalties;
- legal defense costs;
- investigation costs;
- reputation restoration costs;
- Criminal cases – the legal costs incurred until the moment of proving the insured person’s fault are covered;
- Insured against insured – claims of a partner/member against a partner/member or of a subsidiary against the Company;
- Directors who have resigned;
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Claims for property damages and bodily injuries – the legal costs are covered;
Liability related to environmental pollution – the legal costs are covered.