Recent headlines show that company directors and managers are increasingly subject to regulation and pressure: "Experts say claims against directors are on the rise"; "N. sentenced to two years in prison for fraud"; "Former members accuse N. of not paying 43 million VAT", "The board of directors of the cooperative N. is accused of fraud and misappropriation"...
Managers and Directors are held legally responsible for both errors and omissions in the management of their Company. They assume these risks on a "personal, joint and several and unlimited" basis, in accordance with current legislation (*). Therefore, a director and his or her family may see their assets exposed, in addition to suffering other financial or reputational damage for which they will need specialist advice.
To avoid such perils, the best solution is to have a liability policy designed specifically for managers. It provides cover for:
- legal expenses
- bail bonds
- crisis management costs
- coverage for employment claims
- pollution claims
- subsidiary tax liability
- administrative fines and penalties
- compensation and financial damages to third parties
- image restitution expenses
- coverage for the family
- coverage as a representative in subsidiaries and investees
- and other guarantees....
In addition, the policy protects the Company against claims for employment, employee unfaithfulness, data protection liability, contamination claims...
Who could sue an officer or director? The company itself, shareholders, creditors, liquidators, competitors, government agencies, or the employees themselves. For example, a company may sue its directors for failing to carry out thorough market research before opening a new market and thereby causing significant losses. Or the company may be sued by regulatory bodies as a result of administrative violations, for mobbing or harassment of an employee...
This type of policy is taken out by the company, and insures any director, manager, employee, founder...
From €400 a year it is possible to run a company with your back well covered.
More information here.
(*) Companies Act 1989, Art. 133-135 and 262; Insolvency Act, Art. 48.3 and 172.3; Civil Code, Art. 1902; Penal Code, Art. 31.
