Posted on February 14, 2010.
Is it usual for a small company to make directors liability insurance? I think a company with about 2-3 of 4 directors and full time staff turnover not exceeding 150,000 per year.
When a company thinking about taking directors liability insurance?
Directors and Officers Liability Insurance cover protects business administration, managers and executives against claims arising from their decisions and actions taken while the management of their affairs.
If the manager is perceived to have breached any of its functions and then a claim may come from any part of a number of third parties, including:
aec Shareholders
aec Creditors
aec Government agencies and regulatory
aec Employees
aec Accounts
aec Liquidators
aec Customers
aec Suppliers
In a situation of personal property claims director at risk. The administrators can not rely on the company to compensate them. Often, such an allowance the company will be in contravention of the Companies Act. Notwithstanding the provisions of the Companies Act in the event of insolvency there will be no prospect of compensation to the company directors and officers.
The directors and officers liability insurance policy will pay on behalf of the director's fees and costs and civil damages awarded against him.
Skier is right and had the best answer. There's nothing more to say.
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