The new Hong Kong Companies Ordinance (CAP. 622) comes into effect on March 3, 2014. It had increase the legal liability of Directors for both Public and Private companies.
Being appointed as a Director is a significant responsibility. With responsibility, comes liability.
Since a director is essentially the custodian of a company, they are accountable to shareholders, third-party, potential investors, creditors, employees, suppliers, customers, competitors , and of course to the regulators.
Lawsuits can be bought for various reasons: Insider trading, misrepresenting the financial health of the company, anti-trust or unfair trade practices, negligence ... just to name a few.
Directors and Officers Liability Insurance help protects against legal claims for wrongful acts performed by corporate directors or officers as part of their corporate duties. Wrongful acts include omissions, errors, misstatements, misleading statements, neglect or breach of duty. Directors and Officers Liability Insurance provide coverage on Monetary Damages and Defence Costs. We protect Directors and Officers against liability arised from Employment Practice Error. We can even cover Retired Director on account of a Management Error, Employment Practice Error or Defamation committed / allegedly committed before they retired.
Company want to brought on best people to be their director. However, with so much at stake, it is not hard to imagine a knowledgeable director will only join company that had a Directors and Officers Liability insurance in place.
Grand Trust Underwriters can help tailor the Directors and Officers Liability Insurance to fit your company's special needs. To learn more on how we can help or to get a quotation, please feel free to contact us.