Good Intentions are Not Enough
The evolution of legislation such as the Corporations Act, has created a greater need for compliance with regulatory and corporate governance standards. To add to this, the recent global financial crisis has led to an increasingly litigious world.
Specific duties and responsibilities are imposed on directors and officers as to the conduct in which you run a business. Directors and Officers (D&O) Liability Insurance is designed to protect you against claims arising from your actions and decisions in your official capacities.
Any inadvertent failure to disclose information, an omission, a misstatement or a decision taken which has an unintended result can lead to action against you. Being held accountable for actions of others cannot be ruled out, even if you have not engaged in any misconduct.
The cost to defend even a relatively simple matter can be crippling. D&O Insurance is therefore a wise investment for directors and officers to make, to protect their personal liability in the event of court action.
You are at risk of claims by:
- Shareholders alleging misrepresentation in financial statements
- ASIC for breaches of the Corporations Act
- ACCC for breaches of the Trade Practices Act
- The ATO for tax owed by the company
- Employees for unfair dismissal, discrimination or sexual harassment
- Creditors for debts incurred when the company was insolvent, and
- Competitors for defamation, copyright or infringement of patent
D&O Liability Insurance provides essential protection if you have to fund your own legal defence and meet any damages. A policy will cover you when the company has not agreed to indemnify you, without cover your own assets are at risk.
“This article provides a factual summary only of the product(s) we offer. It is not intended to be advice and you should not rely on it as a substitute for any form of advice”
