Directors and Officers Insurance

The insured’s director was the subject of a criminal prosecution by the Police for allegedly using a false or fraudulent document (relating to an activity of the business) for financial advantage or gain by deception.  The insured denied the charge.  Ultimately, the charges and prosecution were withdrawn before the matter proceeded to trial through negotiation between the prosecution and the insured director’s counsel.  Indemnity was extended to the insured director for the legal costs incurred.

A dispute arose regarding adequacy and fitness for purpose of facilities for storage of a sea going vessel. The facility was leased from the government by the insured entity and then sub-leased to the various owners of vessels. The claimants alleged that they attempted to negotiate an outcome to the dispute with the insured’s director and during the course of those negotiations, the insured’s director made defamatory statements about one of the claimants. A Concerns Notice was served on the insured’s director which demanded an apology and payment of the claimants’ legal costs. Indemnity was extended to the insured director, and a panel solicitor was engaged. The result was the defamation claim was not pressed nor were proceedings commenced.

The insured firm was engaged in a tender process for a large project.  One of its directors made a comment in correspondence to other tendering competitors/firms which allegedly breached relevant competition legislation.  The regulator responsible for administering the legislation commenced prosecution proceedings against the insured director (and the company). Indemnity was extended to the insured director (and company) for defence costs in relation to the regulator proceedings.  The proceedings were informally resolved without proceeding to hearing.

The insured was a large national retailer that went into liquidation. A shareholder class action and other proceedings were subsequently commenced by various stakeholders including the liquidator, banks and shareholders with claims valued in the millions.  The directors of the company were named in the proceedings for alleged breaches of the Corporations Act. The relevant insurers extended indemnity to the directors of the company.  The class action was informally resolved while some of the other proceedings were the subject of a judgment with the directors indemnified up to the policy limit.