Directors’ and officers’ liability (D&O)
Besides the operational liability risks, members of the administrative board and the executive management may be held liable, because of their status within the company, for financial losses incurred due to negligence, gross negligence or intentional breach of duty. These persons are liable for such losses with their private assets. By taking out directors’ and officers’ liability insurance, you can cover the costs incurred for defence in legal proceedings and protect the private assets of members of your corporate bodies.
Important questions
What is our company’s structure, and how are we financed? What parties might assert claims against our management and in what amount, e.g. in the case of bankruptcy or a law case?
Do the members of our executive management know their duties according to the law and our statutes and regulations, and do they observe them? Do the persons in question have the necessary competences to exercise their function correctly?
What is our company’s financial situation? Has our long-term financial planning been carried out with diligence? What problems could arise there?
Do members of our corporate management make their decisions with due diligence – based on sufficient information, following the correct process and without conflicts of interests for the decision makers?
Does our corporate management take the necessary precautions to mitigate potential risks (prevention)?
