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Getting to the top to become a director or other top officer is immensely satisfying. It is also quite a task, placing lot of responsibility to perform to the expectations of a large number of people who have stake in the organization. Sometimes, things may not go as planned or intended with the result that these people would feel shortchanged. They may even result to using legal means to right what they perceive are wrongs committed to them by making claims. The claims may be made against an individual director, more than one or an entire board of directors. Such law suits can be filed against a director who works on the board full or part time, executive or not and honorary or paid. Taking out professional indemnity insurance cushions one against such suits and claims.
One form of it is Directors and Officers liability insurance. Apart from directors, this policy can also be taken for other personnel like secretaries, executive level workers like managers and other employees of a corporation. Under this policy, officers are covered against any losses arising from a wrongful act that may lead to claims being made against the officer or corporation. Allegations of discrimination, defamation, harassment, breach of a work contract, wrong or extreme discipline and other conduct are covered here to protect employees.
Another form of this insurance is medical malpractice insurance. Some of the health problems brought before medics are quite serious and are life and death matters. As much as they strive to do their vary best to save lives and restore patients to good health, sometimes things do not go as planned or expected.
The result is that sometimes, legal recourse or remedy is sort by people who believe the medics have acted in a manner that is less than professional. In such a situation, medical malpractice insurance would be a good shield for a doctor or other health worker to have. Otherwise, they could be brought down by one single lawsuit.
As regards creditors, the director or other concerned company representative is covered against claims that they allowed the company to continue trading despite the knowledge that it would not be able to honor debts. Government and state agencies suits are also covered when they are make allegations that hold an officer or company personally responsible for work-related breaches.
Cover against competing firms is also provided should a suit be brought against a company or officer for conduct that is deceiving and misleading. Claims made by shareholders are also covered should they allege that one or a group of company directors have in any way performed a wrongful act. Allegations may also be made against an entire board.
A wrongful act includes alleged or actual breaches of duty, of the trust placed in them, errors they may make, neglect of their duties, wrong or misleading statements they may make. Claims may also be made in regards to omissions among others that may be made against a company director or other executive representative.
Usually, a company will be asked to provide audited consolidated financial records to that the insurer has a good understanding of the financial status of a company. The records will also be used to determine premiums payable when a company is taking out professional indemnity insurance.
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