To attract talented officers or directors, it is essential that they are covered by directors' and officers' liability insurance, simply because the multitude of rules, laws and regulations isn't making it any easier for them to run a company or non-profit organisation.
What can a director or officer be held liable for?
1. Breaches of legal duties
- Each officer or director is subject to a general standard of care
- Directors and officers are responsible for filing financial statements
- Directors and officers are also occasionally responsible for meeting certain social and tax-related obligations (such as payroll withholding tax, social security contributions and VAT)
Setting up a management company is not enough to avoid this type of liability. By law, the permanent representative of the management company bears the same civil and criminal liability as the company he or she represents.
2. Damage, loss and/or injury caused to third parties
Victims and their lawyers will pursue liability not only against the legal entity, but also against its officers and directors. This occurs, for instance, when it turns out that the company or non-profit organisation has insufficient financial resources to pay compensation. There are, however, other reasons that could lead to such a situation.
Protect your directors and officers with proper cover
It goes without saying that you want your directors and officers to be fully committed to your company or non-profit organisation. They will be even more so if they are properly covered by directors' and officers' liability insurance.
Directors' and officers' liability insurance can only be taken out by the legal entity for the directors collectively and not by the individuals themselves.
Full protection for your business operations
KBC provides insurance that's tailored to the needs of your company or not-for-profit organisation.
