Page 23 - Insurance Times January 2018 Sample

extend to cover (i) Damages within permissible limits as are liabilities of Corporate Directors' and Officers' today. The
to be expected within such trials. (ii) Deliberate increase in litigation against directors reflects a change in
contravention of instructions by the subject (iii) the attitude of the general public towards greater
Deterioration in condition which would normally have management accountability and hence the position of a
occurred even without the trial (iv) War and nuclear perils Director is becoming far more onerous. Actions are most
(v) Fines and Penalties. likely to be commended in relation to: (i) Actual or alleged
breach of trust (ii) Breach of duty or warranty of authority
Liability Insurance, Commercial General Liability (iii) Neglect or Omission (iv) Error or misstatement or
/ Combined General Liability / Common General misleading statement (v) Failure to supervise or regulate
properly.
Liability (CGL):
The CGL policy is an ISO form, widely used to provide Who might bring an Action?
commercial enterprises with premises and operations (i) Shareholders: alleging financial loss attributable to
liability coverage, products and completed operations failure by Directors or Officers responsible
insurance and personal injury coverage. Premises medical
payments coverage is often included as well. Under a Public (ii) Employees: alleging unfair dismissal, discrimination,
Liability the indemnity provided is for a claim due to legal sexual harassment or mismanagement of pension funds
liability arising out of accident occurring in the insured (iii) Customers: alleging that they have suffered financial
premises arising out of injury or damage. loss following wrongful advice on the application or
suitability of product
In case of a product liability policy the indemnity is for claims (iv) Competitors: alleging that their businesses have been
due to legal liability arising out of accidents arising out of adversely affected by a restrictive trade practice e.g.:
defects in products specified. In contrast, the operative price fixing
clause of CGL cover for legal liability to pay damages (v) Members of the Public: failure to effect and maintain
because of bodily injury or property damages. There are no adequate control or services.
limitations for cover in terms of insured premises or products (vi) Regulatory Bodies: for offences under the Companies
specified as long as the occurrence and claims are in
Ordinance or breaches in similar legislation.
coverage territory specified, thereby providing a wider
covers. CGL also provides cover for supplemental payments, Potential Allegations: The following list provides typical
medical expenses and fire damages. Cove rage is restricted examples of "wrongful acts" which could be alleged against
to cover only third party liabilities. a Director or Officer - though, this is not an exhaustive list:
(i) Inaccurate statements of financial conditions
Liability Insurance, Contractual Liability:
(ii) Errors in annual accounts
Insurance against loss under a contractual liability
agreement. (iii) Conflict of interest
(iv) Lack of judgment, diligence or good faith
Liability Insurance, Cybercrime Liability: (v) Mismanagement of funds
Scope of the Policy is to cover cyber liability exposures like (vi) Misstatements in prospectuses
Libel, Hacking, inadvertent virus transmission, copyright (vii) Allotment of shares
infringement, loss of identity. The policy coverage is on the
(viii)Unauthorized or imprudent loans or investments
lines of an errors and omissions policy to cover liabilities
(ix) Failure to obtain competitive bids
arising out of hacking email frauds, web developing, website
maintenance and E-commerce. (x) Imprudent expansion resulting in a loss
(xi) Using inside information
Liability Insurance, Directors and Officers (xii) Unwarranted dividend payment, salaries or
Liability & Insurance: compensation

Liability, Directors and Officers Liability: (xiii)Misleading statements filed with the Stock exchange
The Corporate decisions that yesterday did not materially (xiv)Misrepresentation in acquisition agreement for the
affect other people today powerfully impinge on their lives purchase of another Company
and the subject matter has a direct bearing on the potential (xv) Wrongful dismissal of an employee.

The Insurance Times, January 2018 23

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