Page 122 - Liability Insurance IC74

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absolute standard. However, the persons who use
dangerous materials like explosives, fireworks etc have
to exercise more care. Similarly members of learned
professions like doctors, solicitors etc need to exercise
greater care.

Q3. (a) Mention the persons or bodies to whom the
Directors and Officers of Companies can be
legally liable for 'wrongful acts'.

Ans. Repeat of Q10(b) of May 2007 & Q3 of May 2008

The Directors and Officers may be liable to :
4. employees , e.g for unfair dismissal
5. shareholders e.g, for imprudent expansions or loans

or investments
6. creditors e.g, for misrepresentation of financial

conditions
7. government regulatory bodies e.g, for breach of

legislation
8. members of the public e.g, for financial reliance on

incorrect or inadequate or negligent statement of
financial condition etc.
9. the policy is designed to provide protection to
directors and officers of a company against their
personal liability for financial losses arising out of
wrongful acts or omissions in their respective

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