Directors' Liability Insurance
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When disputes arise, the liability of directors is assessed, focusing on the legal rule that every director must be able to properly perform his or her administrative duties. The basic principle of this law is that the board is collectively liable if, for example, improper management causes damage to the foundation and the board member can be seriously blamed for this.
Directors' and officers' liability can be easily insured by taking out a directors' and officers' liability insurance. If you work as a director or supervisory director, you can be held liable in your private capacity if, for example, you cause damage through improper management. If you do not take out insurance for this, this can have major consequences for you as a person. You can cover the risk of mistakes during the performance of your duties by taking out directors' and officers' liability insurance.
Calculate your director's liability insurance premium
What is a directors' and officers' liability insurance?
Directors' and officers' liability insurance is an important insurance for directors, supervisory directors and officers. This insurance protects the private assets of directors, supervisory directors and supervisors against the risk that they are held personally liable for pure financial loss due to errors, omissions or negligence in the performance of their duties. This is for example in case of financial damage due to a managerial error caused by you or a fellow board member. As a board member, you must always perform your duties properly. If damage occurs due to improper management, the entire board is personally liable. To protect yourself against this, you can take out directors' liability insurance. All legal costs, including the costs of a lawsuit, are included in the liability insurance.
Why a director's liability insurance?
A directors' and officers' liability insurance protects the private assets of a director when he/she is held liable. When you are appointed as director of an association, for example, you do not immediately think about possible future liability issues. But recent changes in the law and jurisprudence make it increasingly likely that directors will be held personally liable for the financial consequences of mistakes made by the board. This also means that the private assets of board members can be addressed.
The directors' and officers' liability insurance covers the personal liability of the director and/or officer up to the insured amount. The insurance ensures that the financial risk for directors and supervisory directors is limited and that the private assets of directors and supervisory directors are protected against errors or alleged errors. Private liability insurance does not cover executive and supervisory directors.
What does director's liability insurance cost?
The cost of a directors' and officers' liability insurance depends on the organisation for which you take out the insurance and the amount to be insured. Ask here for an onlinequotationand you will receive the quote within 2 working days by e-mail. We have calculated an indication of the premium below.
You can easily request a director's liability insurance quote online. Do you have any questions about our directors' and officers' liability insurance or would you first like to consult one of our insurance specialists? Please do not hesitate to contact us! You can reach us by phone at 085 - 013 1109. We are at your service Monday through Friday from 08.00 to 18.00.
Premiums for directors' and officers' liability insurance
| Premium per month | ||
|---|---|---|
| VVE | from € 43.00 | Calculate premium |
| Driver | from € 13.00 | Calculate premium |
| Foundation | from € 23.00 | Calculate premium |
Directors' Liability Insurance: For Whom?
A directors' and officers' liability insurance is not obligatory, but it is advisable. The costs of damages resulting from mismanagement can be high and are often difficult to foresee. Damages are claimed more quickly and often the question of guilt is complex. As a director or supervisory director, you have to deal with various partners. Problems can always arise, for example conflicts between members, divisions within the board or debtor problems. Claims for damages can be very high. Naturally, you want to protect your private assets as much as possible and not be personally responsible for the damage claim. With a directors' and officers' liability insurance you reduce the financial risk. There are different director's liability insurances: for Associations and Foundations, Home Owners Associations and Limited Companies.
What does a director's liability insurance cover?
In addition to the personal liability of the insured as director, liquidator or commissioner/supervisor for pure financial loss as a result of an act or omission, the following matters are also covered by the directors' and officers' liability insurance:
- Liability due to improper performance of duties
If you are held liable for damages due to improper performance of duties.
- Liability in tort
When you are held liable for damages by committing a wrongful act.
- Internal and external liability
Liability for damages of the organisation you manage (internal) and liability for damages of third parties (external).
- Legal Help
The costs of defence and legal aid are insured. Even if the claims are unfounded.
- Walk-in
If, after the effective date of the insurance, someone holds you liable for an incident that took place before the effective date, this is insured, unless stipulated otherwise. The claim or circumstance must not have been known to you at the start of the insurance.
- Outlet
If, after termination of the insurance, you are held liable for an incident that occurred before the end date of the insurance, coverage can be purchased in certain cases.
What is not insured?
Damage caused deliberately or as a result of fraud or property crime such as theft, fraud or forgery is not insured. In addition, the following matters are also not insured with a professional liability insurance.
- Fines and penalty payments
- No coverage in America
- Insured persons within the same body shall not be regarded as third parties
- Damages in connection with non-compliance with legal obligations regarding accounting and financial statements
- Liability for damages in connection with legal acts which have provided you with a personal benefit or which were intended to provide a benefit.
Foundation
You are a board member of a foundation. This makes you (co-)responsible for the decisions taken by the foundation. It makes no difference whether the foundation is large or small. Does your foundation have several board members? Do these board members take decisions individually or together? Then it is wise to take out directors' and officers' liability insurance. When several board members take different decisions, the risk of mistakes is present. These mistakes may turn out to be wrong for the foundation and may cause damage. If you or the foundation are held liable, it is good to have coverage for those types of liability. After all, you do not want to lose your entire private assets.
Association
A special basic BTA policy has been developed for associations and foundations with a balance sheet total of up to €2,500,000. As director of an association or foundation, you can be held personally liable for the financial consequences of mistakes made by the board. Even if the claim is not awarded, it may entail the necessary defence costs. In addition, you can also be held personally liable if you perform management tasks for the association or foundation without remuneration. A directors' and officers' liability insurance is then a must.
VVE
A liability claim can have major financial consequences both for the Owners' Association and for the board members individually. This is because board members are jointly and severally liable and, in the event of a claim, their private assets may be affected. The directors' and officers' liability insurance protects you as director of an Owners' Association if you are held liable for mistakes made during the performance of your duties. Even if a claim is made against you in your private capacity. It does not matter whether you receive compensation for your work or not.
Foundation
You are a board member of a foundation. This makes you (co-)responsible for the decisions taken by the foundation. It makes no difference whether the foundation is large or small. Does your foundation have several board members? Do these board members take decisions individually or together? Then it is wise to take out directors' and officers' liability insurance. When several board members take different decisions, the risk of mistakes is present. These mistakes may turn out to be wrong for the foundation and may cause damage. If you or the foundation are held liable, it is good to have coverage for those types of liability. After all, you do not want to lose your entire private assets.
Association
A special basic BTA policy has been developed for associations and foundations with a balance sheet total of up to €2,500,000. As director of an association or foundation, you can be held personally liable for the financial consequences of mistakes made by the board. Even if the claim is not awarded, it may entail the necessary defence costs. In addition, you can also be held personally liable if you perform management tasks for the association or foundation without remuneration. A directors' and officers' liability insurance is then a must.
VVE
A liability claim can have major financial consequences both for the Owners' Association and for the board members individually. This is because board members are jointly and severally liable and, in the event of a claim, their private assets may be affected. The directors' and officers' liability insurance protects you as director of an Owners' Association if you are held liable for mistakes made during the performance of your duties. Even if a claim is made against you in your private capacity. It does not matter whether you receive compensation for your work or not.
For volunteers
A board position is often voluntary. Normally, a volunteer who causes damage must compensate for this himself. However, if you volunteer for a board position, you can also take out directors' and officers' liability insurance. A directors' and officers' liability insurance ensures that you are insured if you are held personally liable because you have not properly fulfilled your duties or have acted outside your powers. With this insurance, your private assets as a director, including volunteers, are protected and possible property damage is covered. The directors' and officers' liability insurance is therefore also for volunteers with a managerial position.
Sole proprietorship
A person with a sole proprietorship is personally liable for debts that his or her company incurs. This is due to the fact that the capital of a sole proprietorship is not separated. The capital of the sole proprietorship is in fact the capital of the director/founder. Therefore, you are already personally liable for paying the taxes and premiums. If a sole proprietorship enters into obligations that are not paid for, there is a directors liability and the director must pay. The same applies to a general partnership (VOF).
Non profit
Many directors assume that they and their fellow directors take their task seriously and will not make any crazy decisions. Nevertheless, there is more to managing a non-profit organisation than just managing or supervising the association or foundation. In practice, a board member can be challenged from both within and outside the association. For example, if an association has new pitches laid out by a non-specialist contractor, because it is cheap. However, the pitches are condemned for competition and therefore have to be replaced. However, the contractor has since been declared bankrupt and the club is therefore incurring double costs. The members of the association can hold the board liable.
For volunteers
A board position is often voluntary. Normally, a volunteer who causes damage must compensate for this himself. However, if you volunteer for a board position, you can also take out directors' and officers' liability insurance. A directors' and officers' liability insurance ensures that you are insured if you are held personally liable because you have not properly fulfilled your duties or have acted outside your powers. With this insurance, your private assets as a director, including volunteers, are protected and possible property damage is covered. The directors' and officers' liability insurance is therefore also for volunteers with a managerial position.
Sole proprietorship
A person with a sole proprietorship is personally liable for debts that his or her company incurs. This is due to the fact that the capital of a sole proprietorship is not separated. The capital of the sole proprietorship is in fact the capital of the director/founder. Therefore, you are already personally liable for paying the taxes and premiums. If a sole proprietorship enters into obligations that are not paid for, there is a directors liability and the director must pay. The same applies to a general partnership (VOF).
Non profit
Many directors assume that they and their fellow directors take their task seriously and will not make any crazy decisions. Nevertheless, there is more to managing a non-profit organisation than just managing or supervising the association or foundation. In practice, a board member can be challenged from both within and outside the association. For example, if an association has new pitches laid out by a non-specialist contractor, because it is cheap. However, the pitches are condemned for competition and therefore have to be replaced. However, the contractor has since been declared bankrupt and the club is therefore incurring double costs. The members of the association can hold the board liable.
Cooperative
A cooperative is a company, which means that you can take out the same insurance policies. As a board member of a company, you are often jointly responsible for the day-to-day running of the company and the implementation of its policies. You have to deal with many different shareholders on a daily basis. Because of this, a conflict can easily arise. Members of a board can be held liable, for instance if they are guilty of mismanagement or if the company goes bankrupt due to financial errors. Prevent that you personally pay for these mistakes and take out a directors' and officers' liability insurance.
Premium
The premium for directors' liability insurance depends on the organization for which you take out insurance and the amount to be insured. On Alpina.nl we have already listed an indication premium for the different policies. This will give you an idea of the premium for directors' liability insurance. Taking out the insurance is customized, which means you can request a quote from us. Within two business days you will then receive a personalized quote via e-mail. If the quote is approved, you can take out the insurance directly with us.
Directors' Liability Insurance
Directors' and officers' liability can be easily insured by taking out a directors' and officers' liability insurance. There are various directors' liability insurances, for example for Associations and Foundations, Home Owners' Associations and Limited Companies. This insurance ensures that the financial risk for directors and supervisory directors remains limited and that the private assets of directors and supervisory directors are protected against errors or alleged errors. Without insurance, you can be sued in your private assets if, for example, you cause damage due to improper management. This can have major consequences for you as a person.
Cooperative
A cooperative is a company, which means that you can take out the same insurance policies. As a board member of a company, you are often jointly responsible for the day-to-day running of the company and the implementation of its policies. You have to deal with many different shareholders on a daily basis. Because of this, a conflict can easily arise. Members of a board can be held liable, for instance if they are guilty of mismanagement or if the company goes bankrupt due to financial errors. Prevent that you personally pay for these mistakes and take out a directors' and officers' liability insurance.
Premium
The premium for directors' liability insurance depends on the organization for which you take out insurance and the amount to be insured. On Alpina.nl we have already listed an indication premium for the different policies. This will give you an idea of the premium for directors' liability insurance. Taking out the insurance is customized, which means you can request a quote from us. Within two business days you will then receive a personalized quote via e-mail. If the quote is approved, you can take out the insurance directly with us.
Directors' Liability Insurance
Directors' and officers' liability can be easily insured by taking out a directors' and officers' liability insurance. There are various directors' liability insurances, for example for Associations and Foundations, Home Owners' Associations and Limited Companies. This insurance ensures that the financial risk for directors and supervisory directors remains limited and that the private assets of directors and supervisory directors are protected against errors or alleged errors. Without insurance, you can be sued in your private assets if, for example, you cause damage due to improper management. This can have major consequences for you as a person.
What are the implications of the WBTR?
Since 1 July 2021, the Act on Management and Supervision of Legal Persons, or WBTR for short, has become active.
This law was created due to numerous incidents and abuses that occurred in recent years. This had to do with poor governance.
The purpose of the WBTR is professionalization by, among other things:
- Improving governance and supervision of associations and foundations
- Preventing mismanagement, irresponsible financial management, self-enrichment, abuse of position and other undesirable activities, harming associations and foundations.
- Driving good governance
This concerns associations, foundations, cooperatives and mutual societies. VVEs and church communities are not covered by the WBTR.
Compare
Are you considering purchasing directors' liability insurance? If so, you will of course want to know what such insurance exactly costs and where you can best purchase it. You can do this by comparing directors' liability insurance. On Alpina.nl we have already listed the premiums of the different policies for you. This will give you an idea of the insurance premium. Of course, you can also request a quote directly from us. We will send you an e-mail with a quote tailored to your personal situation within two working days.
Compare
Are you considering purchasing directors' liability insurance? If so, you will of course want to know what such insurance exactly costs and where you can best purchase it. You can do this by comparing directors' liability insurance. On Alpina.nl we have already listed the premiums of the different policies for you. This will give you an idea of the insurance premium. Of course, you can also request a quote directly from us. We will send you an e-mail with a quote tailored to your personal situation within two working days.
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