Professional Indemnity insurance for directors and officers (D&O)

D&O insurance from AIG Europe S.A. is a Professional Indemnity insurance policy for directors and officersthat covers the personal liability risk of the executive bodies of legal entities (e.g. managing directors of a limited liability company, the executive board of an association etc.). The policyholder is the respective company. The insurance policy covers the defence against unjustified claims and indemnification from justified claims.

Which company forms are eligible for D&O insurance?

D&O insurance is ideally suited for the following companies: limited liability companies, foundations, associations (e.V.), public companies, collective proprietorships, individual firms, limited partnerships etc.  

Are newly formed companies also eligible?

In general, newly formed companies that are financial stable can also be insured. However, compared to established companies they face a higher risk of insolvency. Therefore we will need the business plan, which should also include information about the financing for the next 3 - 5 years.

What cover should be arranged, and what can it be used for?

The requested cover will depend on the customer. Usually, the cover is 10% of sales revenues, whereby the company's equity capital represents the upper limit.

Does the insurance cover apply worldwide?

Yes. However, an international insurance programme may have to be arranged for compliance-related reasons.

Why D&O insurance from AIG?

AIG has been offering D&O insurance worldwide since the 1920s, and in Switzerland since the mid 1980s, which means that it is one of the most experienced providers with extensive claims experience and expertise.

Basic features of manager liability

According to Swiss and comparable foreign laws, the management and controlling bodies of legal entities are personally liable for damages that they inflict on third parties or their own companies in their capacity as an executive body of the company. Such executive bodies may include managing directors, supervisory boards, management boards or advisory boards.  
Liability exists if the executive body has culpably breached an obligation, which led to the resulting damages (causal relationship). Standard of fault is the due diligence of a proper business person. This standard of fault is very strict, as even the slightest negligence can be held against the relevant executive body. Liability exists jointly and severally, i.e. where multiple managing directors are jointly responsible for the management of a limited liability company, each is liable for a breach of obligation committed by the other.
In liability proceedings, the managing director assumes the burden of proof that no breach was committed.