Actions of the director of the company: responsibility, risks, checks, consequences. Who will be responsible and bear the losses? Compensation for damages, expenses.
Interesting material came across in the Vedomosti newspaper on liability insurance for directors of companies (https://m.vedomosti.ru/finance/articles/2019/03/11/796137-oshibki-direktorov).
The point is the following. When accepting an employee for a managerial position, all business owners expect professionalism and efficient work from their side. No matter how much confidence there is in a new employee, every businessman undoubtedly wants to protect himself from the financial risks committed by his erroneous actions. The insurance industry came up with a product for this called Directors & Officers Liability, or D&O for short. The product is not new and is in demand, it was created to compensate for the damage caused to the company by the actions of the management, the cost of legal costs in some cases covers the cost of restoring reputation.
It is no secret that the number of inspections is growing and now the attention of inspection bodies is more often attracted to small and medium-sized businesses. Liability for lost claims can affect not only financial losses, but also the loss of position and freedom. Insurance market leaders in these areas are Alliance, AIG, Ingosstrakh, Alfastrakhovanie, Sogaz, Rosgosstrakh.
The material still contains some interesting figures that indicate an increase in payments.
However, the point is different.
The question of attracting a director will always be relevant. Especially in the context of determining those responsible for the bankruptcy of companies. Despite the fact that the practice is to increase the number of cases and disputes, where claims for damages, subsidiary liability are satisfied, it is worth recognizing that the expansion of options for protecting creditors will only benefit.
Therefore, I strongly welcome the development of a product from the market of insurance services and related to liability insurance. But is it popular and affordable? In my opinion, no. Therefore, in arbitration practice, such cases on payments could not be found. And if so, then we are still far from the universal applicability of various options for protecting the rights of creditors, and it remains for them to act by the old methods. Recovery of damages, bankruptcy, subsidiary liability, challenging the withdrawal of assets, initiation of criminal cases.
March 19, 2019
David Glickstein
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