Directors and officers liability insurance
D & O (directors and officers insurance, also organ or officers' liability insurance ) is a professional indemnity insurance that a company takes for its directors and officers. It is an insurance benefit of third parties, which is counted in kind to the professional liability insurance. However, the D & O insurance provides protection only to the institutions and manager of the company, but not for the company itself, which closes out a D & O insurance for its executive bodies and managers. Insurance cover in respect of breach of duty of their employees brought by third parties against the company claims offers ( in American literature so-called ) Errors & Omissions (E & O) - or ( British term ) Professional Indemnity (PI) cover.
History
First attempts to introduce a liability insurance for company directors, there were in Germany in 1895 by the General German insurance association. Failed, however, an introduction is initially at more moral concerns. After going in the USA in the 1930s, the usefulness of the D & O insurance recognized and it was there mid-1980s to substantial claims against managers, this insurance class prevailed in a broad market and also found internationally more and more attention. The actual origin of the D & O insurance, however, is to look at Lloyd 's of London. Nevertheless, the United States will be universally regarded as the origin of this Versicherungskonstituts. It is therefore not surprising that the first D & O insurance in Germany was then offered by the subsidiary of U.S. insurer Chubb 1986.
Scope
Detected by this insurance are usually all organs (Board, Management, Supervisory Board, Advisory Board, etc.) and managers ( authorized representatives like) a company which is the care of a prudent and conscientious manager (as defined in the relevant provisions of the Companies Act or the Companies Act, a more accurate interpretation is possible to have regular meet only in individual cases). Coverage is in violation of due diligence without any intentional or knowingly breach of duty in the indoor or outdoor ratio. Be Replaces normally any financial losses incurred during the period of insurance and in which eligibility survey still within the insurance term is ( "claims -made " principle ). In addition, usually including property damage already caused to be integrated into the insurance coverage ( " reverse recovery "), unless the collection of the claim is based on contract start date and the breach of duty to the insured persons and the policyholder (usually the company) until completion of the contract does not knew or could have known / need. Mirroring can be found in many D & O contracts called Nachmeldefristen. After this, such claims are covered by the insurance protection, (usually six months to three years) are asserted after termination of the contract within a limited period and in which the underlying misconduct, dated to the period prior to termination. When changing the insurer the late notification of the preliminary contract usually ends with the beginning of the new D & O insurance contract.
Claim Basics
For claims it is fundamentally different in internal liability and external liability. The vast majority of claims, concerns the internal liability. Here, the insured person is protected from claims against the Company or of the institutions of society, such as supervisory bodies / supervisory board members or shareholders / owners. In the external liability insurance claims by business partners (customers / suppliers), competitors, employees, and employees, regulators or other third parties are provided.
Limits of the D & O insurance
Others
A supplement is the D & O insurance often in the so-called hedge ODL Mandates (ODL = outside directorship liability ), ie with the posting of its own employees in institutions of foreign companies. Consistent expansion of insurance coverage of companies offers in criminal law the so-called industry - criminal protection insurance and fidelity insurance (especially against employee crime). In the EU, through the implementation of anti -discrimination directive also hedge against employment contract legal protection claims (keyword EPLI - employment practices liability insurance ) more and more relevant. Also for this insurance products are already available.