How To Protect A Company From Liability

Transcription

1 DIRECTORS & OFFICERS ESSENTIAL BUSINESS INSURANCE COVER POLICY RISK FACT

2 introducing FirstUnited FirstUnited is a leading insurance intermediary group operating in Malta and under Freedom of Services throughout the EU. We are one of the largest insurance brokers in Malta and have a clear approach to business which is based around trust, personal service and integrity. We believe that our experience, dedication and attitude to service are the most valuable assets we offer. We have a highly experienced and dedicated team of 40 insurance specialists that are committed to protecting and serving you. We pride ourselves that no matter how large or small your business is, we will work relentlessly to ensure you receive the highest levels of product and service excellence. We understand that fast service and efficient claims handling is essential to help give you the peace of mind to focus on your business. We offer a respected team of insurance professionals with many years of experience who aim to make the claims service we provide a key differentiator for choosing to work with us. We are confident that our industry knowledge of the local and international insurance markets can help you identify and conclude the most appropriate insurance solution for you and your business. contents 01. INTRODUCTION 02. DIRECTORS & OFFICERS 03. SIGNIFICANT FEATURES & BENEFITS 04. SIGNIFICANT EXCLUSIONS & LIMITATIONS 05. COMPLAINTS PROCEDURE Should you need further details or have any questions we will be delighted to help you. For customer service information contact us on or insure@firstunited.com.mt 01

3 directors & officers liability insurance Directors and officers walk a tightrope every day, making decisions involving complex transactions and based upon diverse and sometimes ambiguous information. Driving company profits and growth and maintaining compliance with an ever growing array of legislative requirements, regulators are strengthening enforcement efforts and tightening corporate governance requirements to raise the levels of board accountability; where a director or officer is perceived to have made a judgement or a decision negatively impacting business, they can be implicated and held personally responsible. Claims can be brought by anyone with an interest in the affairs of the company; regulators, statutory authorities, shareholders, other directors, employees and in the case of insolvency, creditors, liquidators and administrators. Despite the best business judgement, qualifications and experience, they are exposed to litigation that may allege a failure to perform their management role. This could ruin reputations, damage careers or result in endless court battles and mounting legal bills which in turn can lead to losing personal assets and devastate the individual s personal wealth. Smaller sized businesses can be just as vulnerable to claims as larger companies. The directors of smaller companies face similar legal responsibilities and exposures as those working for a large listed company. For small businesses, directors are often the sole or major director or shareholder and most will not have the resource to defend a claim which may put their business in jeopardy. Many directors incorrectly believe that they are protected by the limited liability status of their company. IMPORTANT: This document is only a summary of cover and does not contain the full terms and conditions of the contract of insurance. The full terms and conditions of cover can be found in the policy document. 02

4 significant features & benefits COVER AGAINST LEGAL DEFENCE COSTS, EXPENSES, SETTLEMENTS OR DAMAGES AWARDED AGAINST INSURED PERSONS FOR WHICH THEY ARE PERSONALLY LIABLE FOR WRONGFUL ACT WHICH MAY INCLUDE: Breach of duty or trust Neglect, error or omission Misrepresentation or misstatement Libel, slander or defamation Breach of contract Breach of warranty or authority Any violation of the Companies Act Shareholder action Employment practice related acts INSURED PERSON MAY INCLUDE: Past, present and future executive and non executive directors Employees in a managerial or supervisory capacity An employee where named as a defendant in employment practice disputes May extend to include spouses/ civil partners, heirs, estates, legal representatives COMPANY REIMBURSEMENT: Cover to provide for the reimbursement of the company for claims paid on behalf of it s directors and officers. NON EXECUTIVE DIRECTORS: Cover is provided for non executive directors where the limit of liability is exhausted and indemnity is not available from any other source. INVESTIGATION: Covers costs and legal expenses of individuals in connection with the preparation or attendance at official and professional investigations. HEALTH & SAFETY CORPORATE MANSLAUGHTER: Covers defence costs and legal representation expenses for offences under the Corporate Manslaughter or Health and Safety Acts. EMPLOYMENT PRACTICE: Covers costs and legal expenses of individuals to defend claims for wrongful dismissal, sexual harassment, discrimination and retaliation, failure to employ or promote. EXTRADITION PROCEEDINGS: Covers costs and legal expenses to appeal or overturn a case for deportation, extradition or arrest warrant. EMERGENCY DEFENCE COSTS: Cover extends to include an amount in respect of advance defence costs, fees and other legal expenses reasonably incurred. OUTSIDE ENTITY: Provides blanket protection for any external directorships held by the insured person at the specific request of the company. AUTOMATIC ACQUISITION: Cover will automatically extend to include any new subsidiary company acquired or created during the period of insurance. MANAGEMENT BUY-OUT: Cover can be extended on request to provide a period of continuation of cover for the relevant directors and officers. DISCOVERY PERIOD: In the event that cover is not renewed or replaced, cover automatically can be extended to allow a 30 day period for claims to be made, free of charge with the option to extend for a year at an additional premium. RETIRED DIRECTORS OR OFFICERS: Provides cover for retired individuals in the event of their not holding any other insurance protection. REPUTATIONAL CRISIS COSTS: Provides cover for costs incurred in seeking the services of a crises management firm or public relations consultant to mitigate the adverse effect of an insured s reputation as a result of a claim. CORPORATE TAX LIABILITY: Provides cover for any personal liability that may arise from non payment of corporate taxes due to insolvency of the company. POLLUTION COVER: Provides cover for pollution where indemnity is not available from the company. INSURED VS INSURED: Provides cover for one insured person making a claim against another insured person provided claim is brought outside of the USA or Canada. OFFERING OF SECURITIES: Cover can be provided in the event that funds are raised in respect of any public or private debt offering. ENTITY COVER: Provides cover to specifically protect the company as opposed to its directors and officers and enables liability claims to be brought directly against the company. 03

5 significant exclusions & limitations PROVEN FRAUD OR ILLEGAL PROFIT: No cover to apply where a fraud or illegal profit final judgement is obtained. PARENT COMPANY EXCLUSION: The policy will not respond if a claim is brought by or the instigation of any parent company. PENSION TRUSTEES: Cover will not apply for any individual acting in the capacity of trustee of any pension, superannuation scheme, profit sharing or similar scheme. PRIOR CLAIMS BODILY INJURY OR PROPERTY DAMAGE CLAIMS (can be insured under business insurance covers). POLLUTION OFFERING OF SECURITIES PROFESSIONAL SERVICES (can be insured under a Professional Indemnity Insurance). CLAIMS BROUGHT IN THE UNITED STATES OF AMERICA OR CANADA WAR OR TERRORISM 04

6 OUR COMPLAINTS PROCEDURE: We want to provide a first class service. If you have any cause for complaint you should, in the first instance, contact the person who arranged the cover for you, or the Office Manager. If you remain dissatisfied with the response, we will refer your complaint to our Compliance Manager for a separate review. They will notify you once they receive your complaint and will provide you with a final response when they have completed their inquiries. If we are unable to resolve your complaint to your satisfaction within 8 weeks, or if we have provided you with a final decision letter, you may be able to refer your complaint to the Malta Financial Services Authority. Following the Complaints Procedure does not affect your legal rights. HOW WE WILL USE YOUR DATA: FirstUnited holds data in accordance with the Data Protection Act. It may be necessary for us to pass data to other organisations that supply products and services associated with your contract of insurance. If you give us false or inaccurate information and we suspect fraud, we will record this and the information will be available to other organisations that have access to the database(s). FirstUnited Insurance Brokers Limited 25, Villa Eden Princess Elizabeth Street Ta Xbiex XBX 1103 Tel: insure@firstunited.com.mt FirstUnited Insurance Brokers is a member of the Malta Insurance Brokers Association FirstUnited Insurance Brokers Limited is authorised and regulated by the Malta Financial Services Authority and this can be checked by visiting the MFSA s web site at Our Company Registration Number is C designed to deliver