directors and officers

Definition

Directors and officers liability Insurance (often called D&O) is liability insurance payable to the directors and officers of, or immediately to the company itself, as compensation for losses or advancement of defence costs in the event an insured suffers such a loss as a result of a lawsuit brought for alleged wrongful acts in their capacity as directors and officers.

Intentional illegal acts, however, are typically not covered under D&O policies.

Examples of Wrongful Acts
  • Mismanagement
  • Abuse of authority
  • Unfair Practices
  • Misrepresentations
  • Negligent supervision
  • Imprudent investment
  • Insolvent trading
  • Failure to disclose
  • Conflicts of interest
  • Poor results
  • Contractual disputes
  • Intellectual property
  • Defamation: Libel or Slander
  • Disputes regarding Mergers & Acquisitions

 


Covers

 

  • Fully compensation of any claim against of an insured person regardless of the degree of protection provided by his company. 
  • Pre-claim inquiry cost
  • Defense cost
  • Compensation from significant losses in the value of public or privately traded securities of the company
  • Protection from confiscation of property
  • Protection from asset freezing
  • Reputation Expenses 
  • Administrative Fines 
  • Coverage for unpaid corporate tax from negligence

 


Potential Claimants

 

  • Creditors
  • Regulators. Increasing scrutiny and whistle-blowing. The governments are demanding more transparency
  • Competitors. For anti-trust or unfair trade practices allegations.
  • Customers
  • Employees

 

 Directors and officers graph

 

Examples of Real Cases
  • Shareholder’s lawsuit against the directors of a metal company in UK after a merger of the company. The shareholders claim that before the merger they had been proposed by the directors a specific ratio of exchange between old and new shares but at the end they received a different ratio.
  • A group of shareholders filed a lawsuit against the directors of a food company in Belgium for causing severe financial damage due to overstatement of the company’s financial position.  
  • The directors of a financial company in Isle de Mann face a creditor’s lawsuit because the latter considered that the decision of the directors’ to put two problematic under management Funds of Funds under the litigation process was beyond their authority. 
  • Lawsuit against a telecommunications company in Switzerland and its directors due to the sale of a branch. The plaintiff claims that the value of the sale was fraudulently underestimated leading to a disastrous deals for the creditors and the shareholders. 

 


 

1. Definition

Directors and officers liability Insurance (often called D&O) is liability insurance payable to the directors and officers of, or immediately to the company itself, as compensation for losses or advancement of defence costs in the event an insured suffers such a loss as a result of a lawsuit brought for alleged wrongful acts in their capacity as directors and officers.

Intentional illegal acts, however, are typically not covered under D&O policies.

2. Examples of Wrongful Acts 

 
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One of the most important elements of business success is to keep your business running, whatever lies ahead. The enviable experience we received through our long-term cooperation with the most successful companies in Cyprus enables us to provide the optimal solutions to our clients. Our products are tailored to the needs and the specific demands of your company.

Visit us today and receive the best business insurance offers for your company at the most competitive prices. In Pitsas Insurances we provide the following professional insurance contracts, that protect your business against any risk:
  • Building and Equipment Insurance
  • Employers Liability (compulsory from the law)
  • Technical Insurances
  • Public Liability Insurance
  • Professional Indemnity Insurance
 
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Employers Liability Insurance:

This is an insurance policy that protects employers from liabilities arising from disease, fatality, or injury to employees resulting from workplace conditions or practices. In Cyprus this type of insurance is compulsory.

As a rule of thumb, if someone is working under your supervision, you are legally required to have employer’s liability insurance.

It covers:

  • Full-time and part-time employees
  • Self-employed contractors you hire
  • Temporary staff, apprentices and volunteers

Despite all your best efforts, workplace injuries can happen when you least expect them – sometimes with devastating consequences.

 
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Building and Equipment Insurance:

This type of insurance covers your business’ buildings and all personal property under the care or control of your business.

An extended contract of Building and Equipment insurance covers:
  • Fire
  • Lightning
  • Explosion
  • Smoke
  • Damage caused by vehicles/aircrafts
  • Earthquake, Volcanic Eruption
  • Inflation adjustment
  • Hurricane, Flood, Lightning, Cyclone, Tornado
  • Gas, Water, Oil, LPG (Liquefied petroleum gas) and Fuel leak
  • Unrest/Protest march, Strike, Lockout, Labour Turmoil
  • Malicious act, vandalism
  • Tree falling, tree branch falling
  • Debris removal, demolition, house support and placement of props
  • Electrical malfunction
  • Theft, attempt at theft
  • Immediate reintroduction of the insured amount
  • Detection and Access
  • Accidental Damage
  • Accidental damage on Glasses adjusted on building
  • Financial Support after Damage or Loss
  • Accidental damage on cables or underground services
 
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Technical Insurances

Pitsas Insurances provides the following three forms of technical insurances:

  • EEI (Electronic Equipment Insurance):
    This type of insurance protects against damage on all types of electronic equipment in shops or offices, such as computers, laptops, printers, photocopiers, fax machines, call centres etc. Also it provides extended coverage in the case of diagnostic centres, clinics, hospitals, laboratories etc.
  • CAR (Contract’s All Risk) Insurance:
    This type of insurance covers the expenses related with risks associated with the building of any type of infrastructure. The developments of construction technology in association with the increasing demand and cost of constructing had as result the expansion of needs regarding CAR insurance. The overwhelming majority of owners of new-built constructions, engineers with advisory role, architectures and construction financers consider as a prerequisite the use of a CAR insurance before the commencement of building.

    In addition, the undertaking of any public construction from private companies has a prerequisite a CAR insurance.

In Pitsas Insurances through our long-term cooperation with the leading construction companies in Cyprus we can provide both our advice and expertise for the optimum technical insurance contracts.

 
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