Directors’ liability

Directors’ liability and personal assets: tailored advice

As a result of mounting regulatory pressure and the growing litigiousness of business life, directors’ civil liability is increasingly being called into question. Directors’ liability insurance (D&O) enables you to protect your personal assets if legal proceedings or investigations are launched against you.

In the life of a company, numerous events can result in legal action being taken against the executive managers (manager, chairman, vice-chairman, treasurer, etc.). It may be a minority shareholder’s complaint about a capital increase, investigations by an administrative authority in France (CNIL, AFA, AMF, etc.) or abroad, management faults, or actions to make good a deficiency in the company’s assets, for example. It should be noted that, in France, corporate officers’ legal expenses or damages are not paid by their company. The risk is that they may be obliged to pay these sums out of their own personal assets. To protect you from this eventuality, Verlingue provides personalised support, from contracting tailored, dedicated insurance through to settling the claims.

Verlingue’s solutions

Choosing and negotiating suitable D&O cover

D&O cover, while not mandatory, is strongly recommended for all company directors. It covers the cost of defending their case and, if applicable, any damages (with the exception of the fines imposed with a criminal conviction). The “open perils policy” cover provided by D&O cover, which is very broad and not subject to an excess, allows the insured party to engage the lawyer of their choice. Depending on your company’s size, industry sector, shareholder base, etc., your Verlingue consultant will help you choose the most appropriate contract and the right level of cover at the optimum cost, after adjusting certain provisions if necessary.

Specific cover for complex operations

As an expert in financial risks, Verlingue recently set up a “Financial Lines” department specifically to support senior executives during tricky operations. These include initial public offerings, whatever the market (French, European, American or Asian), setting up listed companies in view of a forthcoming acquisition (known as special purpose acquisition companies), mergers, etc. Our advisors draw on these unique fields of expertise to negotiate additional, bespoke covers for inclusion in your D&O contract. You will find this a valuable aid if you have to conduct complex operations.

Personalised guidance and support for dealing with an incident

Verlingue consultants specialised in insuring financial risks are regularly called on to handle major losses in France and abroad. Their expertise is your assurance of specialised guidance and support with swiftly arranging cover if your liability were called into question. This procedure and our responsiveness will spare you from having to pay the lawyer’s fees yourself and, at what is often a difficult time on a personal level, will bring you peace of mind and enable you to rapidly organise your defence. It goes without saying that, given the very specific nature of this risk, we arrange for these incidents to be handled with the utmost confidentiality.

Interventions by the RCMS (corporate mandate holder insurance)

What are the main complaints involving D&O?

  1. Management fault or risky investments / fault by negligence or omission.
  2. Failure to fulfil an obligation to ensure health and safety / Workplace accident / Death of an employee.
  3. Complaint by a creditor in the face of the company’s insolvency.
  4. Labour leasing.
  5. Fraud / swindling / breach of trust.

Meet our expert

Alexandre Tolot

Director of Financial Lines and Special Risks

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