Directors and Officers Liability Insurance

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If a manager commits a breach of duty in the performance of his office as a member of the company’s body, he is held liable with all his assets both to the company and its shareholders, members, creditors and other persons, in contrast to employment law, which determines the upper limit of liability of the employee vis-à-vis the employer. A shareholder, member, creditor, but above all the company itself is by operation of law entitled to claim damages directly from the member of the company's body.

The most economically effective and easily accessible tool for the protection of company property and personal property of natural persons who are members of bodies of these companies is directors and officers liability insurance.. The insurance covers the entire scope of legal liability of members of the company bodies stipulated not only by the Commercial Code, but also by other generally binding legal regulations.

The insurance is arranged by the company, the insured is a natural person - any past, present or future member of the company's board of directors, member of the company's supervisory board, executive director, member of the company's control committee, proxy or any equivalent position under other countries. Insurance can be arranged for all types of companies, automatically also for their subsidiaries, as well as for state-owned enterprises, state-funded and non-profit organizations.

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Insurance coverage

The insurance covers any damage caused directly to the company. The claim is asserted directly against the insured and the insured is obliged to compensate the injured party directly. The insurance company compensates directly the injured party. The insurance also covers any damage caused to a third party, which the company had to pay in lieu of the insured. The claim is asserted directly against the insured, the insured is liable for the damage, but the company provides compensation for the damage instead of the insured. The insurance company then compensates the company for damage. In addition to the financial damage itself, the insurance also covers the costs associated with the defense of the insured, legal representation and court proceedings, if any, or the costs associated with out-of-court settlement.

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Advanced insurance coverage

As part of the directors and officers insurance, also the following may be arranged:

  • costs of public relations and reputation
  • compensation for losses due to participation in the hearing before a court
  • costs of extradition proceedings - costs of extradition of the insured abroad
  • defense costs in proceedings against personal liberty or property
  • personal expenses in connection with the confiscation of property
  • costs of a financial guarantee in court proceedings
  • costs of defense in connection with damage to property or health
  • costs of psychological assistance
  • costs related to interventions of regulatory bodies
  • costs in urgent cases
More information about Liability insurance against damage caused by members of company bodies (D&O insurance)