You probably already know how litigious or society is these days, with lawsuits and claims being brought against companies for various reasons. Many businesses think that having general D & O Insurance protects them against these types of claims.If one of your customers becomes injured or your delivery driver slams into another car, you may not be covered by your general liability insurance policy. The following cases are going to require something a little more. The following cases are going to require directors and officers insurance and by studying them you'll be prepared in case similar claims are ever brought against your organization and its directors and officers.
Releasing Information
If your company releases an employee's medical records, you could have a D & O claim brought against your company for an action of breach. Your company and its directors will need to defend against such a claim, and that's exactly what directors and officers insurance is for.
Retrenchment
There was a recent example of a company that fired one of its directors, alleging that he sexually harassed another employee. The director sued the company and won for wrongful termination and libel. These types of cases are never easy to defend against and the company luckily had D & O insurance to make the situation easier.
Injuries
If you are providing pool cleaning services and you leave a chemical in the pool too long, thus injuring one of the homeowners you work for, that family could sue your company and its directors and officers for breaching health and safety laws.
The Verbal Contract
You should always be careful what you say and also who you say things to. There's one instance of a director who accepted an order at a trade fair. The problem is that the director couldn't remember the details the very next day. When the customer found that the contract wasn't going to be honored, that customer sued the company in question and the directors, claiming breach of contract.
Verbal Assurances
In a similar instance, a construction company was sued and lost for losses incurred by a certain architect who was reliant on a director's assurances that the contact bond had been arranged. When the bond had indeed not been arranged, that director was sued personally for breach.
Insolvency
A few years ago, a company went into liquidation after one of its directors ran up an invoice with an elevator maintenance company. The cost was incurred in the company's name and the elevator maintenance company brought an action for the outstanding invoices and the directors were held personally liable because of the Insolvency Act.
This may seem like a lot of D & O cases, but these only represent some of the situations your company could find itself in. You should know that there are plenty more cases where Liability Insurance becomes a company saver. You never know when a particular claim may be brought against your company for which you have no way to financially defend yourself. Directors and officers insurance is a must if you have a board of directors, investors and venture capitalists and you want to make sure they're protected just in case.
No comments:
Post a Comment