Praesidium spa, the company of the Federmanager system, with its network of Welfare Managers and thanks to its direct relationship with businesses, presents itself as an interlocutor for insurance sectorcapable of developing personalized welfare plans to protect the entire company management in the contractual, integrative and complementary areas. To understand the type of services aimed at protecting the management class in “complementary” areas connected to their professional life, we interviewed the CEO and General Director of Praesidium Spa, Valeria Bucci.
Director, once upon a time it was only the managers of large listed companies who had to worry about disputes that could involve them personally: how does the market work today?
In the face of the growing responsibilities that weigh on the top figures of companies, the D&O – Directors & Officers – policy allows the protection of the personal assets of administrators, directors, managers, attorneys and all other corporate figures who, through powers of attorney and delegations, carry out organization, management and control activities of the company, in cases where they are involved in any compensation for damages. This is a policy that responds in the event that not only corporate liability is attributed, but also the personal and economic liability of the director; we can certainly say that the D&O policy completes the coverage package that a joint-stock company should have.
Known in Italy as “Policy for the Civil Liability of the Management and Control Bodies of the Company”, what specifically is a D&O policy and who is it aimed at?
The Directors & Officers, D&O coverage first and foremost guarantees the civil liability of directors, general managers and auditors, by virtue of specific articles of the Civil Code which outline the liability towards companies, towards corporate creditors and towards Shareholders and third parties.
In joint-stock companies, the management and control bodies are in fact liable unlimitedly, and with their personal assets, for the violation of obligations, i.e. for the negligent failure to comply with the duties imposed on them by the law and by the articles of association.
Each shareholder, regardless of the share subscribed, as well as customers and competitors of the company and other figures, can therefore bring liability actions against the directors.
Furthermore, this policy is an insurance solution that fulfills the task of protecting the personal assets, not only of the aforementioned top positions, but also of other figures who receive the same responsibilities following specific delegations and powers of attorney, such as, by way of example but but not limited to, the financial director, rather than managers or employees with special powers of the Board of Directors, or members of the Board of Directors or equivalent corporate body.
What are the advantages that can be obtained by formulating a D&O policy?
By formulating a D&O policy, among the advantages that can be found, in addition to the protection of the assets of the insured, is the protection of the company.
In fact, let’s try to think specifically if a manager’s assets were not enough to pay for the damage caused to the company’s assets: with the D&O policy the company guarantees itself a maximum amount in the event of damage, as it is preferable to the possibility of having to seek compensation on the manager’s personal assets. Furthermore, the company has a tax benefit from purchasing a D&O policy because the premiums are deductible by including them among the company’s operating costs.
Article 15 of the CCNL for industry already protects the liability of managers: but does the D&O policy therefore overlap or integrate it?
We know very well that art. 15 of the CCNL for industry provides that “all civil liability towards third parties for actions committed by the manager in the exercise of his duties is borne by the company”.
However, there are some cases in which art. 15 cannot operate, for example when the actions committed by the manager were carried out with gross negligence or willful misconduct ascertained by a final judgment, or when the Company is an injured party of the crime perpetrated by the manager (liability actions): also in this case the economic burden imposed on the company clearly cannot be implemented.
D&O coverage, therefore, integrates the protections provided by art. 15, since it also guarantees coverage for cases related to gross negligence (never for fraud as it is not insurable) and for liability actions brought by the company.
Wanting to go into specifics about what the D&O policy insures? By way of example but not limited to, is it possible to provide a quick and easy list of some of the most common cases in which it is possible to defend oneself with a specific insurance policy?
There are certainly several cases in which it is possible to defend oneself with a specific insurance policy against a request for compensation from the members and the company for liability actions, such as following a violation of the legislation on personal data. This represents a particularly current case following the entry into force of the GDPR which includes disputes for incorrect processing of personal data (collection, recording, processing, storage, use, communication and dissemination). Another case may be the failure to monitor an employee’s acts of disloyalty or the incorrect management of legal disputes, for example illegitimate dismissal, demotion, etc.
However, the lack of supervision and control over mobbing suffered by employees or sanctions imposed on the company for errors in tax and social security obligations, for example, also represents one of the most widespread cases.
Last but not least, cases of legal proceedings and expenses incurred by the company in disputes relating to pollution and reimbursement of environmental consultancy costs are also widespread.
**Considering the potential financial and reputational damage resulting from lawsuits or investigations, what are some key strategies companies can implement to minimize their Directors & Officers’ exposure to liability beyond relying solely on D&O insurance?**
## World Today News Interview: Protecting Management in the Modern Era
**Introduction:**
Welcome to World Today News. Today, we’re diving into the crucial topic of protecting management in the ever-evolving business landscape. Joining us are two esteemed guests:
* **Valeria Bucci** – CEO and General Director of Praesidium Spa, a leading firm specializing in tailor-made welfare plans for businesses. Praesidium spa is a part of the Federmanager system, working closely with companies and their management teams.
* **Marco Rossi** - A renowned legal expert specializing in corporate law and Director & Officer liability.
We’ll be discussing the growing need for Directors & Officers (D&O) insurance, its benefits, and how it can safeguard both companies and their management class from potential liabilities.
**Section 1: The Evolving Landscape of Management Liability**
**(Addressing Valeria Bucci)**
**Interviewer:** Ms. Bucci, the article mentions that D&O insurance is becoming increasingly relevant for companies of all sizes. Could you elaborate on this trend and explain why it’s crucial for businesses to consider this type of protection today?
**(Addressing Marco Rossi)**
**Interviewer:** Mr. Rossi, we often hear about the concept of “personal liability” for company directors. Could you provide our viewers with a clear explanation of what this means in the context of a business? What are the potential legal and financial consequences for management if they are found liable?
**Section 2: Understanding D&O Insurance**
**(Addressing Valeria Bucci)**
**Interviewer:** Ms. Bucci, could you shed some light on the specifics of a D&O policy? What exactly does it cover, and what types of situations does it address?
**(Addressing Marco Rossi)**
**Interviewer:** Mr. Rossi, the article mentions that Article 15 of the CCNL for industry offers some protection for manager liability. How does a D&O policy relate to this existing legal provision? Does it overlap, complement, or both?
**Section 3: Benefits and Impact of D&O Insurance**
**(Addressing Valeria Bucci)**
**Interviewer:** Ms. Bucci, let’s explore the advantages a D&O policy can bring to companies and their management. What are the key benefits for both parties?
**(Addressing both guests)**
**Interviewer:** Beyond the protection it offers, what impact can a D&O policy have on a company’s overall business strategy and its ability to attract and retain talented leaders?
**Section 4: Real-World Examples and Future Outlook**
**(Addressing Marco Rossi)**
**Interviewer:** Mr. Rossi, could you provide some concrete examples of situations where a D&O policy has proven to be invaluable for a company or its management team?
**(Addressing both guests)**
**Interviewer:** Looking ahead, do you anticipate the demand for D&O insurance continuing to grow? What factors in the current business environment are driving this trend?
**Conclusion:**
Thank you, Ms. Bucci and Mr. Rossi, for sharing your valuable insights with our viewers. We hope this discussion has provided a clearer understanding of the crucial role D&O insurance plays in protecting companies and their management in today’s complex business world.
