According to SZ information, the Swiss insurer Zurich leads the consortium in which Volkswagen has insured its executive and supervisory boards against claims arising from their activities. The VW supervisory board is demanding compensation for the burdens from the diesel scandal from the former CEO Martin Winterkorn and the ex-Audi boss Rupert Stadler. VW did not name the amount of the claim against the two ex-managers. The total damage for the group is estimated at more than 30 billion euros.
In the so-called D&O insurance – after the English directors ‘and officers’ – VW has a cover of 500 million euros, arranged by the Bremen specialist broker Krose. However, it only takes effect if the two board members did not act deliberately. It is not without reason that the VW supervisory board only accuses them of “negligent breaches of duty” in its statement.
Winterkorn’s lawyers promptly responded to the statement. “He rejects the allegations made against him,” wrote Kersten von Schenck and Felix Dörr. However, Winterkorn is aware that the supervisory board is legally obliged to examine possible claims and, if necessary, assert them.
The rejection of the claims and Winterkorn’s understanding are part of the game between the two sides, which should lead to the highest possible payment by the insurer. Everyone involved knows that the managers cannot pay compensation from their private assets. Volkswagen is also unlikely to be interested in the former bosses going bankrupt.
Under no circumstances may Winterkorn openly admit that he negligently breached his duty of care. If he does that, he would violate his obligations to the insurers – who then may not pay.
Now the insurers will first try to fend off the claims. If the lawyers hired by the insurers see VW’s claims against the managers as unjustified, the group has to sue them. But that is very unlikely. Industry experts assume that insurers and VW will agree on a comparison – 250 million euros plus defense costs would be realistic.
The industry is currently dealing with another potential major loss: The insolvent Greensill Bank in Bremen has cover for over 100 million euros, arranged by the Bonn broker Dr. Ax. The insurers fear that a wave of pandemic-related insolvencies will roll on them, which often lead to claims from D&O policies. The prices for D&O insurance are currently rising sharply.
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