D&O POLICY: DIRECTORS’ LIABILITY
The socio-economic-legal environment in which the board of the company operates has shown considerable risk exposure for directors in recent years. Increasingly, there are reports of claims for actual or alleged negligent acts.
Directors of a Company may be held liable with their personal assets for violation of laws or regulations, mala gestio, violation of bylaws, etc. Discrimination Mobbing, harassment, wrongful conduct within subordinate relationships may result in a claim for compensation.
First and foremost, the D&O Policy guarantees the liabilities that fall on Directors, Managers and Auditors, under Articles 2392, 2393, 2394, 2395, 2396 and 2407 of the Civil Code to the Companies, to corporate creditors and to Shareholders and Third Parties.
Area Brokers Industria, has found it essential to include among the guarantees offered in the D&O Policy, coverage for claims made by employees, former employees and directors, as a result of unjustified, wrongful termination, sexual, racial, environmental discrimination and demotion or failure to hire or promote.
WHAT IS D&O POLICY?
D&O (“Directors & Officers Liability”) policy is the insurance solution that protects the personal assets of directors and members of other management bodies (directors, managers, officers, auditors and any supervisory board members) when they are sued for damages.
Indeed, management and supervisory bodies of corporations are liable, unlimitedly and with their personal assets, for breach of duty, that is, for culpable failure to comply with the duties imposed on them by law and the articles of incorporation. Any shareholder regardless of the share subscribed, as well as customers and competitors of the company and other figures, can bring liability actions against the directors.
WHAT RESPONSIBILITIES DOES THE ADMINISTRATOR COVER?
D&O policy refers to a “default” liability and is configured:
- In a violation of an obligation imposed on them;
- In a creation of harm;
- In the presence of a causal link between violation and harm.
WHAT DOES THE D&O POLICY COVER?
The Policy insures Directors, Managers and Auditors who work for the Company and are personally and jointly liable with their assets for damages caused to third parties in connection with the performance of their duties. Coverage is also extended to members of the supervisory body (ex DL 231/200), employees responsible for privacy (196/2003) and employees responsible for safety (81/2008).
Individuals who could make claims are the Company itself, shareholders, the bankruptcy trustee, corporate creditors, third parties in general, and government agencies.
WHO CAN MAKE THE CLAIM FOR DAMAGES?
The Company itself, shareholders, bankruptcy trustee, corporate creditors, third parties in general, and government agencies.
WHY TAKE OUT A D&O POLICY?
The D&O Policy is important because it is the insurance tool, which, in the event of a claim, secures the personal assets of the insured persons, protecting them from both the costs and legal fees of defending themselves, as well as from any actual property damage.
WHY TAKE OUT A D&O POLICY?
The D&O policy is the insurance tool, which in the event of a claim, secures the personal assets of the insured persons, protecting them from both the costs and legal fees of defending themselves, as well as any actual property damage. This is an extremely advantageous solution full of benefits for those who subscribe to it:
- the Policy has unlimited retroactivity;
- the Policy reimburses the Company for what it has paid to its directors, Officers, Auditors, because permitted or required by law, in order to hold them harmless from the consequences of a claim made against them;
- the Policy also reimburses the Company for all costs, charges, and defense expenses related to the above;
- the Policy indemnifies claims of a non-contractual nature and from those made by employees regarding labor law disputes such as, for example: demotion, bullying;
- policy costs are tax deductible.
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