As a manager, you know how much responsibility there is in each of your decisions. Regardless of the business you run, be it a start-up, a small or medium company or a corporation, being a manager means not only that you are the decisions maker, but also the one responsible in case of errors or mistakes. From non-fulfillment of managerial obligations, to negligence, non-compliance with contractual provisions or labor legislation, any of these can affect your activity and cause a lot of problems.
That is why it is mandatory for any director or executive director of a joint stock company to take out a liability insurance. For a limited liability company director such insurance is optional, but for sure is useful.
Groupama portfolio offers the liability insurance of directors and executives (D&O), a type of insurance policy that helps you more easily overcome the undesirable situations that may arise when the decisions taken by management have a negative impact on the company. causing damage to customers, shareholders, employees, creditors or other parties. In other words, insurance helps you protect the company’s assets and the reputation of the person involved or the business.
The insurance policy can be concluded by the company, as a legal entity and included in the management insurance package. The positions entitled for such insurance: the administrator, a member of the company’s board of directors, a member of the company’s supervisory board, executive director or executive director of an external entity, employees, when they are sued as co-accused, the company, when obliged or it is allowed, according to the law, to pay compensations to the above, for claims directly addressed to them.
The risks to which the company is exposed by any action, error or omission, erroneous declaration, breach of duties or negligent act, committed by the insured in the exercise of a management function are covered.
What compensation is awarded?
The amounts that the company is obliged to pay are fully covered, based on a court / arbitration decision or amicable agreements between the parties involved, respectively:
- the amounts established as compensation
- defense costs (investigation and defense costs)
- costs related to compensation limitation services (fees and / or costs for the services of a lawyer or external consultant specialized in the field of activity in which you operate, requested in order to minimize the compensation)
- emergency costs (investigation costs and equipment used in emergency situations)
What is the price of a D&O insurance?
The cost of a civil liability insurance of directors and executives with a liability limit of 100,000 euros can start from 100 euros / year (around 8.4 euros / month).
Strengths of the company’s director’s liability offer
In most cases, you do not know the potential extent of the payment obligation in the event of an injury, so an adequate liability limit protects the company’s cash flow. In addition, by ensuring D&O:
- You have flexibility in choosing the level of the coverage limit according to the specific needs of the company
- You get financial support to continue the business and keep the integrity of the company’s assets
- Increases the trust of business partners and customers
Challenges and difficult moments are part of any entrepreneur’s path – you can’t avoid them and you can’t predict them, but you can provide them with the right policy. We hope this material has helped you discover it and better understand what it can do for you.
Take the step to an assured future and ask for an offer. Write to us at relatii.clienti@groupama.ro or directly on the website https://www.groupama.ro/contact or choose the Groupama network of agencies and collaborators.