Covers your business’s bosses if someone alleges, for example, a breach of health & safety regs or employment law. It pays their legal expenses and protects their personal assets.
D&O insurance protects the personal assets of a company’s directors and officers, as well as that of the company itself. The cover also provides reimbursement to the company when indemnifying its directors and officers. D&O insurance pays for legal defence costs, settlements and awards when defending directors and officers from a valid claim.
The company’s Memorandum of Incorporation (previously Articles of Association) may or may not allow a company to indemnify its directors and officers. There is no guarantee however that the company will pay the heavy financial burden of defence costs in prolonged legal proceedings or damages awards. The company may also not have the financial resources to indemnify the directors and officers in the event of a claim.
Yes, subsidiary boards are covered. There is also provision for automatic inclusion of newly acquired or created companies; however the Insurer would have to be notified of these.
A derivative action is when the shareholders sue a third party (such as a director or officer) on behalf of the company.
A class action is when a group of people take a person (such as a director or officer) to court. The new South African Companies Act under s157 properly introduces the concept of a class action into South African law. Any of the following persons may apply for a class action:
The application can be made to a Court, the Companies Ombud, the Take-Over Panel, or the Commission. The application for a class action has been simplified, in that one is no longer required to act through a liquidator.
Derivative actions and class actions are both covered under the D&O policy.
A derivative action is when the shareholders sue a third party (such as a director or officer) on behalf of the company.
A class action is when a group of people take a person (such as a director or officer) to court. The new South African Companies Act under s157 properly introduces the concept of a class action into South African law. Any of the following persons may apply for a class action:
The application can be made to a Court, the Companies Ombud, the Take-Over Panel, or the Commission. The application for a class action has been simplified, in that one is no longer required to act through a liquidator.
Derivative actions and class actions are both covered under the D&O policy.