A strict liability regime applies to managing directors, board members and supervisory boards in companies. Corporations are just as affected by this as medium-sized companies or cooperatives, foundations or associations. Even volunteering does not offer protection against personal liability in case of damage. A single mistake can quickly threaten the existence of the person in question, because in Germany managers are liable with their entire assets.
In recent years, many prominent claims have been released. In the diesel scandal, for example, insurers paid an amount of more than 270 million euros as compensation to the VW group. At the moment, it is not yet possible to predict what Wirecard will look like in the end.
At the same time, the demands on managers are constantly increasing. Responsible for this, in addition to the already known issues, are the current special challenges in the international economy, the crisis in Ukraine and the increasing regulatory requirements, which must be taken into account and observed. Think, for example, of the Supply Chain Act or the Whistleblower Directive. Consequently, there is an increasing demand for D&O insurance by companies to know that executive bodies and employees are covered.
In the case of such insurance, the company is the policyholder. Bodies are insured people. D&O insurance protects against unfounded claims. In the case of justified claims, the agency will consider them closed. It does not matter whether the claims are asserted by third parties or by the company itself against its own body.
Current market development.
It can be seen that corporate D&O insurers are moving in a similar direction as many property insurers: many have started to increase contract premiums to offset rising claim payouts. At the same time, the conditions are restricted. Insurers are also becoming less willing to offer large capacities. Until now, it was easy to take out insurance with an insurer in the amount of up to 25 million euros, but today an insurer often only offers capacities of up to 15 million euros.
Therefore, it may be more appropriate in the future to extend or supplement such corporate D&O insurance with personal D&O insurance. But not only market development can be a reason for the conclusion. In addition, there are many other benefits executives enjoy through D&O personal insurance. Systemically, these advantages are already present because the insured, the manager, can determine the insurance coverage himself and, ultimately, have his own policy in his hands. In this case, as the policyholder, he can regulate by himself and independently of the company to what extent he wants to extend the protection of his private assets.
individual insurance coverage
In the case of personal D&O insurance, the insurance coverage refers exclusively to the policyholder as the insured person and thus to the manager himself, which creates the possibility of individual insurance coverage.
The clear advantages are:
- Personal coverage ensures an insured sum that is exclusively available to the insured and that they do not have to share with other people.
- Insurance coverage can be adjusted individually. The manager himself determines the content of the contract.
- Insurance protection applies beyond the employment relationship. The protection also applies if there is a risk of liability long after the manager has left the company.
- Personal coverage does not share the fate of business coverage when there are market adjustments or intentional restrictive changes.
Advantages of CIF:BIZ ChefSache
With the CIF:BIZ ChefSache from ConceptIF Biz, GGW offers personal D&O insurance that clearly exceeds the usual market standard in terms of the scope of its services. The advantages of this insurance solution speak for themselves:
- Legal advice at the highest level (ChefLine), which can also be used before a possible claim as soon as such a claim is subjectively feared
- Legal advice to avoid breaches of duty
- 2 times the maximum sum insured
- 12-year non-waivable late registration period
- no subordination to corporate D&O insurance
- Right to choose, if there is company D&O insurance, whether it should prevail or personal D&O
- Deductible insurance for directors of corporations
- Continuity (both in conditions and in sum insured)
- reputation cost recovery
- Criminal judicial protection before the initiation of the criminal process and during the criminal process itself
- continuous salary payment
- Conflict management and mediation cost recovery
the joint stock company
In the event that D&O insurance is contracted for a member of the Board of Directors by a public limited company, there is also a particularity: An excess of at least ten percent of the damages up to at least 1.5 times the fixed remuneration annual membership of the Board of Directors is provided. This deductible is regulated in Section 93 (2) sentence 3 of the German Corporations Act.
As a general rule, personal D&O insurance can also be used to guarantee this legal deductible. Therefore, the sum insured for members of the board of directors of a public limited company must be at least 1.5 times the fixed annual salary.
Gossler, Gobert & Wolters is one of the largest independent and owner-managed industrial insurance brokers in Germany. About 450 employees at ten locations serve mid-industry customers. GGW is a company with tradition on the one hand and a modern image on the other. The roots go back to the year 1758, when Johann Joachim Wolters was sworn in as a broker at the Hamburg Stock Exchange.
To meet the demand for a wide range of security products even today, GGW has expanded in recent years and added additional specialty areas. Today, with the subsidiaries, the focus is also on pension issues or strategic risk management, as well as special brokerage services for credit insurance and accounts receivable financing.
Last year, Gossler, Gobert & Wolters merged with other owner-managed insurance brokers and underwriters under the GGW Group umbrella. With around 1,300 employees, the companies serve their medium-sized customers at more than 50 locations in Germany and the DA-CH region.