By Cecily Melia, SATIB Insurance Brokers
SATIB Insurance Brokers are always looking for ways to add value to their client’s portfolios. We have a responsibility to offer innovative products to keep them, and their companies, as comprehensively covered as possible.
For this reason, SATIB Insurance Brokers introduced Directors’ and Officers’ Liability Insurance, which is especially relevant against the backdrop of existing legislation such as the Companies Act (71) of 2008, and the subsequent King III Report on corporate governance in South Africa.
According to Allianz Global Corporate and Specialty, non-compliance with laws and regulations is one of the top causes of claims against directors and officers in South Africa, along with negligence and maladministration and lack of controls.
The Companies Act, and King III Report, outline that directors and officers of all companies – private and non-profit – can be held personally liable for any wrongful or negligent acts, as well as breaches of their fiduciary duties.
But with D&O insurance, the personal assets of directors, officers, and appointed persons acting in supervisory or fiduciary roles, are protected if they are sued in their personal capacities for alleged wrongdoings.
Private companies have a direct interest in purchasing this insurance as the costs of defending legal actions may well exceed the net worth of any company’s assets, and a judgment against a director could lead to major financial losses.
Importantly, companies need to realise that apart from the current directors and officers, past and future directors and officers can also be held liable and the cover offered by SATIB Insurance Brokers extends to them. It will cover the costs and expenses of defending directors and officers against allegations arising from their positions.
Subsidiary boards of an insured company are also covered, and newly acquired or created companies can be included (if we are notified).
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