One of the main assets of any company is its reputation. Even if it has had an excellent record for years, loss of confidence and image is undoubtedly the worst possible publicity it can have.
Aware of this risk, companies are increasingly opting for the different forms of protection available on the market, in order to maintain their reputation and, consequently, to ensure the company’s continuity.
However, the company’s image depends on more than its performance. It can also be affected by the actions of its directors, officers and senior executives, especially those with more responsibility and greater decision-making powers.
Protection against claims
RibéSalat’s Directors and Officers civil liability insurance (D&O) is an effective tool for protecting them in the event of a third-party claim for wrongful acts committed in the exercise of their duties, regardless of the sector and whether the claim is justified or not.
As a company’s administrator, director or officer, there are many circumstances that can jeopardize your personal assets. To guarantee security and independence in decision making, RibéSalat Directors and Officers civil liability insurance offers extensive cover for a wide range of scenarios:
Compensation: If you are covered by the policy and are sued for negligence in your duties as a director, the insurer will pay compensation to third-party claimants, if you are found guilty.
Bonds: Any bonds required by the court for possible civil or criminal responsibility will be posted.
Defence and legal representation costs: All costs, legal expenses and fees necessary for the director to exercise his or her defence will be paid. RibéSalat’s policy allows the director a free choice of legal representative.
Subsidiary tax liability: If the director is obliged to assume subsidiary tax liability under the law, payment to the tax authorities will be covered.
Employment practice: If an employee sues a manager for harassment, slander, discrimination or even breach of contract, both the manager and the company will have the cost of their defence covered, plus any possible compensation.
Subsidiaries and investees: The D&O policy covers all directors and officers of subsidiaries and those of investees designated by the contracting company.
Asset protection: In the event of assets being seized, the policy covers the payment of mortgages, children’s school fees, electricity, water and gas bills, as well as life and family accident insurance premiums, and any other fixed family expenses you may have.
Who can make claims and who is protected?
Under RibéSalat’s policy, “third party” includes shareholders, employees, customers, creditors and suppliers, competitors, public bodies such as the Bank of Spain and the Tax Agency, as well as the general public, in certain cases.
In addition to directors and administrators, the policy protects the following:
- Members of the Board of Directors
- Members of internal committees
- Directors and executives in investee companies (appointed by the Insured Company)
- De facto administrators
- Employees acting as risk managers
- Employees responsible for the legal department
- Employees (cover for employment practices: claims for discrimination, mobbing, etc.)
- The founder of the insured company
- The individual appointed as liquidator or administrator in the event of the voluntary dissolution of the insured company
- Company Secretary and Deputy Secretary who are not Board members
- Administrators or directors acting as Compliance Officers
- Data Protection Officer (DPO)
- Internal legal officer
Under what legislation are these responsibilities regulated? Administrators are obliged to act with the diligence of a responsible entrepreneur and a loyal representative, making every effort to be fully informed about the progress of the company. Their duties include those of good faith, loyalty and secrecy. This is reflected in legislation such as the following:
- Capital Companies Act (the 12/2014 amendment extends the responsibility of directors)
- The Civil Code
- Insolvency Law
- General Tax Law – Art.43 on the subsidiary responsibility of administrators
- Criminal Code – 2010 amendment and subsequent versions