As a company director, you can be held personally liable for mistakes and negligence.
Thus, not only are your private assets at risk, this can also lead to financial losses for your organisation, employees and third parties.
Directors' liability
Directors & Officers: as a director 'Directly' in the spotlight
Company law imposes increasingly stringent requirements that you must meet as a director. The laws and regulations are becoming increasingly complex and stringent. This increases the risk of being held personally liable.
Increasingly, responsible parties are appointed and compensation is sought for damages. Not only the company, but also its directors are often held personally liable.
Protect yourself against financial consequences and personal losses with Directors & Officers (D&O) insurance.
Why have directors' liability insurance?
Entrepreneurship is about taking risks
The Companies and Associations Code (CPC) has changes in store for all companies, including a limit on directors' liability (better known as the 'cap').
Due to built-in limitations, this 'cap' proves less foolproof in practice than hoped.
- the requirement of a 'minor error'
- and the exclusion of lawyers' fees
It does confirm that directors can still be held liable.
Employment liability is no longer the proverbial €1 fee
With the impact of issues around employment (e.g. #metoo) reaching even into the boardroom, directors need to be aware of emerging challenges such as:
- unfair dismissal
- discrimination and harassment in the workplace
It is essential that company directors are aware of these shifting dynamics and the associated (personal) liability. Compensation in employment liability is no longer the proverbial €1 fee.
Personal liability of director
Do you think setting up a company fully protects you from liability?
While this is true for shareholders (who are usually not personally liable for corporate activities), unfortunately this is not true for directors.
In case of management errors, even protective barriers of legal personality can be breached. This means that your personal assets may be at risk to indemnify claims.
What does directors' liability insurance cover?
Find out how this powerful policy protects your leadership and secures your future.
Directors' liability insurance is essential protection for anyone on the board of a company or NPO.
Not only current drivers can enjoy this essential coverage, former and future drivers also enjoy the benefits.
Who you can include:
- Actual drivers
- Representatives in external entities
- Emerging affiliates
- Employees with specific responsibilities
D&O insurance protection may also extend to:
- Spouses
- Legally cohabiting partners
- Heirs
Frequently asked questions
Discover the most frequently asked questions about this insurance. Over the years, we have collected this information and summarise it here. Easy, right?
When is it best to take out directors' liability insurance?
As early as possible in your start-up.
Prevent rather than cure. Unforeseen circumstances can throw a spanner in the works of our plans. If your company runs into financial difficulties, it may not even be possible to underwrite this insurance.
When financial problems arise, various parties may be ready with claims due to governance failures. Consider
- unpaid supplier invoices
- disgruntled shareholders
- compulsory redundancies
Proper preparation protects you and your business from these unexpected twists and turns.
Materné conducts a thorough risk analysis to ensure that your business continues to evolve effortlessly.
Why is it best for a NPO to take out directors' liability insurance?
Due to recent legislative changes, NPOs are now also covered by the Companies and Associations Code.
This entails an important change: the liability of directors of a VZW is now similar to that of a company. This means that NPOs can also be declared bankrupt.
This increases the importance of directors' liability insurance in claims with:
- regarding grants
- public procurement
- unfair market practices (especially in associations with commercial activities)
Who should buy directors' liability insurance?
Protect not only your directors, also secure your company and affiliates. That is why we take out the policy in the name of the operating company (not in the name of the directors).
Together, we conduct a thorough risk analysis. Sometimes several affiliated companies may be covered under the same policy.
Our targeted approach ensures that your business structure is adequately protected. So that you look ahead with confidence.
The Companies and Associations Code provides a 'cap' up to which amount a director/company can be held liable - so why do I insure a larger capital anyway?
The 'cap' limitation is valid only when a 'slight error' is at the origin of the management error. But what is a slight error?
This limitation does not apply to lawyer's fees. Therefore, it is not an unnecessary luxury to think twice about your insured capital.
What are the points to consider when taking out directors' liability insurance?
Materné constantly keeps its finger on the pulse in the insurance market. This is how we select the perfect partner insurers.
Choose a policy that answers:
- employment liability
- founder's liability
- different types of director's recorded mandates
- and more
Materné will be happy to advise you.
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