In a recent spate of litigation, a number of adverse court verdicts regarding the liability of directors and officers of companies to a third party were passed where the directors and officers were held personally liable for payment of compensation to the third party. Ordinarily, the directors and officers are bound by duty towards the company itself, shareholders, employees, creditors, customers, competitors, members of the public, government and other regulatory bodies. Any breach or non-performance in the duties can result in claims against the companies and/or its directors of the company by reason of any wrongful act in their respective capacity. The Directors’ and Officers’ Liability Insurance policy has been designed specifically to meet any financial liabilities imposed upon them.

This policy is necessary for directors and officers of every company if they wish to avoid potential litigation owing to:

• Failure of supervision
• Inaccuracy in statements of financial accounts
• Lack of judgement and good faith
• Mismanagement of funds
• Mis-statements in prospectuses
• Allotment of shares
• Unauthorized loans or investments
• Failure to obtain competitive bids
• Imprudent expansion resulting in a loss
• Using inside information
• Unwarranted dividend payment, salaries or compensation
• Misleading statements filed with the stock exchange
• Misrepresentation in acquisition agreement for the purchase of another company
• Wrongful dismissal of an employee