King III and The Companies Act No. 71 of 2008 renders Directors’ and Officers’ Liability Insurance crucial for all companies regardless of size or incorporation. Directors and Officers now find themselves in a far more onerous position than ever before, with legislation holding them more accountable for any wrongful act or negligent actions, as well as breaches of their fiduciary duties.
Moving South Africa in line with international trends of Alternate Dispute Resolution (ADR), the King III Report recommends that ADR clauses be included in all business contracts. It suggests that mediation should be used as a management tool and as a dispute resolution instrument that allows for efficient, cost-effective and private settlements. The Camargue D&O product comes with the use of dispute resolution services. A director would have already covered that aspect of his/her duty toward the company by purchasing the insurance policy.
The Companies Act No. 71 of 2008 also changes the business landscape substantially, as far as the incorporation, administration and management of companies is concerned. Ushering in a new era of uncharted territory for Directors and Officers in South Africa, no person should consider taking up a position as a Director before ensuring that there is a Directors’ and Officers’ Liability insurance policy in place. When a board of directors is assembled, it is best to have a Directors’ and Officers’ Liability policy in place to manage the risk exposure faced by these directors.
Directors and officers face personal liability if the company experiences loss or damage due to their conduct not meeting the required standard. Section 78 of the Act allows for indemnification and directors’ insurance. D&O Liability Insurance provides protection for the directors and officers of a company in the event of legal proceedings pertaining to the failure to perform duties as they relate to the company.
Following an allegation of a wrongful act, including (but not limited to):
Brought about by:
The Policy also covers the company:
Camargue’s unique M³ approach
to insurance is geared towards managing, mitigating and migrating critical
business risks – an outcome achieved through the provision of value-added risk
benefits to policyholders. Notwithstanding the coverage provided in terms of
the policy, the additional risk management benefits further enhance the
Camargue product offering and go beyond simple insurance. The overall
result is a well-rounded and complete solution to the risks faced in a
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