Executives Civil Liability

Managers of companies face certain risks as executives, and they may be held responsible to compensate for damages to third parties (usually shareholders) due to improper performance of the manager’s duties. Legal defense costs subject to an unjustified claim in such a case can be high.

If the company is covered by the executives’ civil liability insurance, the insurance company will reimburse the financial loss incurred by the company manager as a result of the third party’s claim for improper performance of the manager’s duties, as well as legal defense costs if the manager has to defend himself against the claim for compensation.

Executives civil liability insurance cover is usually divided into 2 parts:

  • Part A: covers the consequences of inappropriate actions of managers when the company itself cannot compensate for the loss on behalf of managers (not permitted by law, the company struggles financially, etc.).
  • Part B: reimbursement of costs incurred by the company itself to compensate third parties for the damage caused by the actions of managers.

Executives civil liability insurance may additionally cover certain cases subject to workplace ethics violations: actual or suspected unlawful dismissal, failure to employ or non-promotion, sexual harassment or other forms of persecution, and discrimination, etc.

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Darija Tonkich

Team Leader

+37061621503 darija.tonkich@aon.lt/ee