Directors' and Officers' Liability
Personal liability of directors and officers for decisions made in managing the company, and the cost of defending them.
Also calledD&O Liability · Management Liability
First thing, todayNotify at the first notice, inquiry or investigation letter, not when proceedings begin.
- Tell the insurer now, not after the assessment.
- Admit nothing and settle nothing and pass every letter to the insurer the day it arrives.
- Every document within the time the insurer asks for it.
When you would claim
- A regulatory investigation or show-cause notice to a director
- A shareholder, creditor or employee claim against management
- A statutory authority's inquiry into company decisions
- Defence costs incurred before any claim is formally made
What insurers most often rely on
- Notification after the policy period on a claims-made wording
- Prior knowledge of the circumstances at inception
- Deliberate dishonesty or personal profit, once established
- Claims between insured persons, where excluded
- Fines and penalties, which are commonly outside cover
On a liability claim these are opening positions. Opening positions are argued, and the insurer expects them to be.
The documents
half of it belongs to the other side10 items, and half of them are somebody else's. Get the allegation in writing early: an insurer cannot tell you what is covered until it can read what is being said against you.
- Claim form and the notice, summons or inquiry letter
- Board minutes and resolutions relevant to the decision
- The company's constitutional documents
- Correspondence with the regulator or claimant
- Details of every director and officer involved
- Any indemnity the company has given them
- Legal opinions already obtained
- Cancelled cheque and bank details in the insured's name, for the NEFT payment
- Details of any other insurance covering the same risk
- The claim or the notice, and the defence costs incurred so far, invoiced and dated
Next
Liability Claim: The First Response
In liability, the damage is usually done in the first conversation, by somebody being decent and apologetic to a person who has been hurt.
Most often lost by: Admitting liability.
Read the limit of indemnity
No sum insured and no average clause. A liability policy is capped by its limit of indemnity, written as one figure for any one accident and a larger one for the year, with defence costs sometimes inside that limit and sometimes outside it. Which of the two it is matters more than the figure.
Filed under: Liability · Third-party and legal claims
Claims that sit next to this one
the same allegation, answered elsewhereProfessional Indemnity
advice rather than the board's decisions
Fidelity Guarantee
loss caused by an employee's dishonesty
Cyber and Data
the breach the board is asked about
Had a notice and not replied to it yet? Report a loss or call 92514 56334.