Directors and Officers Insurance
from Zoom Insurance
Holding the position of a director or an officer of a company can place such individuals at high personal risk. Directors' personal liability for the legal and correct performance of their fiduciary duties to their companies is unlimited, but unlike companies, directors cannot hide behind limited liability - ultimately all of their personal assets are at risk.
Furthermore, directors are "joint and severally liable" - the actions of one are the legal responsibility of all. Those in non-executive roles are equally liable. Some say that they are even more exposed in view of their limited involvement with the day-to-day business of the company.
If a company, shareholders, creditors or anyone believes that they have suffered a loss as a result of a wrongful act by a director, or they believe fiduciary or contractual duties have been contravened, they can sue no matter how spurious the claim or allegation may be.
In recent years, there has been a dramatic rise in the incidence of claims, and the trend continues upwards with the aid of a legal community that remains ever ready to advise would-be litigants.
The Directors & Officers Insurance policy also called the “management liability insurance “provides cover to the individual Directors (Executive as well as Non-executive) and designated officers for their unintentional “wrongful acts “while discharging their managerial duties, leading to legal liabilities. It protects the corporate directors and officers for such liabilities arising out of legal suits been filed by employees, shareholders, clients, creditors, government, competitors, and regulatory authorities. In rare situations, the policy can protect the organization too for liabilities arising out of “Employment practices” and “Past securities “.
