Kilgetty Statutory Services enters into a sub-agency agreement with RBS to offer Director and Officer liability Insurance
Kilgetty Statutory Services (Pty) Ltd has entered into a sub-agency agreement with Risk Benefit Solutions (Pty) Ltd to provide their clients and clients of other auditing and legal practices with a Director and Officer liability Insurance product.
Chris Wilson, Managing Director of Kilgetty has stated that in terms of the new Companies Act a Director or prescribed officer of a Company may be held liable for any loss, damages or costs sustained by the Company as a consequence of any breach by the Director of a duty contemplated in the standard of Director’s conduct, or a failure to disclose a personal financial interest in a particular matter, or any breach by the Director or prescribed officer of a provision of the Companies Act or the Company’s Memorandum of Incorporation.
Section 78(7) of the Companies Act allows for a Company to purchase Directors’ & Officers’ (D&O) Liability Insurance which is a contract of insurance designed to protect past, present and future D&O’s by indemnifying them for loss resulting from a wrongful act, including errors or omissions for which the D&O is alleged to have committed in their capacity as a director or officer.
The cover includes reimbursement for civil damages, defence costs, judgments, settlements and reimbursement to the D&O’s company/employer for any indemnification to the director or officer for any such costs.
Chris Wilson believes that the recent Cricket South Africa debacle and the Centro Properties Group court case in Australia has highlighted the potential risk to Directors and that the nominal cost of the insurance premium is negligible compared to the risks associated with a claim made by shareholders, employees or creditors under the new Act. Wilson advised that all Directors should revisit their current Director and Officer Insurance product as a matter of urgency and should there be no policy in place, that they contact the offices of Kilgetty Statutory Services (Pty) Ltd.
The costs of the insurance can be paid either as an annual premium or on a monthly basis and the costs and the cover are as follows: