D&O Insurance

Best D&O protection thanks to best technology

Whether a DAX group or a midsize business, the responsibility of managers to navigate companies through today’s risk landscape while simultaneously meeting the high legal requirements is greater than ever.

Managers are personally liable for mistakes.

Finlex claims practice shows: Compared to the same period last year, claims have more than doubled. This also brings Directors & Officers insurance into focus. D&O insurance gives managers a lifeline to prevent professional risk from becoming personal.

Globalization, digitization, and sustainability are the challenges of today's business life.These megatrends are accompanied by tighter regulation.

This significantly increases the relevance of corporate governance and compliance* in companies.

*All operational measures that ensure the legally complaint behavior of all company employees.

Compliance is the original responsibility of management!

Facts about liability of members of governing bodies:

Organhaftung

Internal & external liability

The company itself and third parties can bring claims against corporate managers.

Personal

Members of governing bodies are liable with all their private assets for damages due to culpably committed breaches of duty.

Joint and several

Even if departments are separated, the executive bodies of a company are jointly and severally liable.

Negligence

Even slight negligence is sufficient to render a company liable for damages as a corporate body.

Exculpation

A reversal of the burden of proof applies to internal liability: The manager has to prove that he or she was not culpable of a breach of duty.

D&O
for companies

Today, D&O insurance is an integral part of a company's insurance portfolio. As a special form of pecuniary loss liability insurance, it is used to protect company managers and supervisory bodies against claims for breach of duty both by the company itself (internal claim) and by injured third parties (external claim). As insurance for the account of third parties, it is taken out by companies for the benefit of their management personnel.

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Personal
D&O

Personal D&O insurance is suitable for managers who want to provide for themselves – either in addition to an existing D&O group insurance policy or because a D&O insurance policy for the company does not exist.
The contract is concluded by the natural person individually. The benefits under the contract are therefore exclusively available to it and do not have to be "shared" with others.

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D&O for managers
of lawfirms

Managers have to organize and to supervise the processes and their errors or omissions can cause significant financial loss to the law firm. This D&O-product especially protects managing partners, office managers, authorized signatories, compliance officers, members of supervisory bodies and other insured persons in case of a claim by the law firm (internal claim) and by third parties (external claim) because of a supposed breach of duty concerning their obligations in their functions. Policyholder is the law firm; it is an insurance for the protection of the insured (natural) persons.

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D&O-
deductible
insurance

Where the German Stock Corporation Act (Aktiengesetz) or the German Corporate Governance Code requires a deductible to protect an executive board member against risks arising from his/her professional activities by a D&O group policy, the D&O deductible insurance steps in. It insures the portion of a D&O claim to be borne by the executive board member him/herself and thus protects him/her from recourse to his/her personal assets.

D&O

What is insured?

The original task of the D&O insurer is to examine the question of liability, defend unjustified claims against the manager and, if necessary, pay compensation in lieu of the manager.

Who is insured?

The “classic” D&O group coverage is taken out by the company for the benefit of members of management and control bodies (executive board, management, supervisory board, advisory board, etc.) and other persons who have a management function or special position in the company.

Who provides insurance?

In Germany, currently, around 35 insurers offer D&O insurance. If companies operate globally and international insurance programs are also to be implemented, the number of possible “lead insurers” is realistically reduced to less than ten.

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