Page 34 - Liability Insurance IC74

The Insurance Times

They may become liable to pay for damages for
wrongful acts such as failure of supervision of the
affairs of the company etc.

Apart from common law responsibilities, the duties
of directors under the Companies Act relate to the
prudent management of the Company. These duties
can be delegated to the members of management
.Specific duties may also be expressed in the Articles
of Association.

Thus, the directors and officers may be liable to :
(a) employees , e.g for unfair dismissal
(b) shareholders e.g, for imprudent expansions or loans

or investments
(c) creditors e.g, for misrepresentation of financial

conditions
(d) government regulatory bodies e.g, for breach of

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

incorrect or inadequate or negligent statement of
financial condition etc.
(f) the policy is designed to provide protection to
directors and officers of a company against their
personal liability for financial losses arising out of

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