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Directors and Officers (D&O Cover)
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What is Directors and Officers liability cover? • D&O insurance indemnifies the directors and officers for claims against them personally for wrongful acts committed • Includes cover for judgements, settlements and defence costs • Purchase of D&O Insurance now permitted under Companies (Auditing and Accounting) Act 2003 – S. 56
What is Directors and Officers liability cover? • D&O insurance indemnifies the directors and officers for claims against them personally for wrongful acts committed • Includes cover for judgements, settlements and defence costs • Purchase of D&O Insurance now permitted under Companies (Auditing and Accounting) Act 2003 – S. 56
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Typical Claim Examples
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Below are some examples of claims that have occured under the various policy covers and extensions. Please clikc on the '+' beside the relevant heading for detailed examples.
  EPL (Employment Practices Liability) CLAIMS EXAMPLES |
• An individual award of €130,000 for an unfair dismissals case against an Irish
manufacturing company as the company failed to implement “any fair
disciplinary procedures”.
• An Irish labour court award of €508,000 to four female clerical workers denied
equal pay with their male colleagues for nine years.
• Following a decision by an equality officer, an Irish organisation is facing a bill
of almost €500,000 in back money to 186 part time female cleaners for
discrimination.
• An employee of an Irish company dismissed as the employer broke a prior
agreement to allow the employee work from home. Award of €52k.
• €90k awarded for a case of constructive dismissal against an Irish
newspaper.
• Irish financial institution settled a discrimination and sexual harassment claim
for €150k with costs of €120k prior to a ruling by the Officer of the Director of
Equality Investigation (ODEI).
• A claim against a Hospital for constructive Dismissal settled for €40k, with
costs of €21k.
• €56k for a checkout employee of a supermarket sacked after the company
wrongfully accused her of turning up for work smelling of alcohol.
• A claim for sexual harassment against an executive of a large Irish
organisation cost over €300k to investigate and defend, even though no
settlement or award was made.
• A barman who was terminated after being questioned following the
disappearance of some money. He sued for wrongful dismissal and was
awarded €35k plus costs by the High Court, principally as the company did
not follow proper disciplinary procedures.
• A case for retaliatory dismissal against an Irish Semi-State body following
racist comments settled for $78k damages, with $58k costs. |
| PTL (Pension Trustee Liabilty) CLAIMS EXAMPLES |
• Inadvertent payment of pension benefits to deceased employee’s mistress
rather than wife.
• Negligent advice to employee’s widow in relation to employee’s share option
scheme resulting in loss of benefits.
• Failure to maintain adequate supervision to prevent fraudulent withdrawal of
pension fund assets.
• Making of unauthorised loans which became irrevocable and caused loss to
the fund.
• Conflicts of interest between duty owed to the fund and to the employer
company following clawback of surplus by employer company.
• Sale of property in depressed market leading to fall in value of fund assets.
• Failure to ensure collection of contributions from employer company which
later went into insolvent liquidation.
• Action brought by dismissed accountant against trustees for calculating
pension incorrectly.
• Failure to monitor an outside fund manager’s poor performance leading to a
claim against the trustees.
• Transfer of assets to new scheme went ahead under the wrong rules with the
effect of reducing funds available to beneficiaries.
• Pensions administrator incorrectly advised employee regarding benefits due
on early retirement date. Employee resigned and set up his own business
taking out a loan in reliance upon anticipated income from the pension fund.
Trustees were unable to make the payments promised by the administrator
as they were outside the scheme rules. Trustees and administrators were
sued for loss due to financial commitments.
• Complaint made to Pensions Ombudsman alleging, among other things,
benefit improvements given to active members were greater than those given
to pensioners.
• Allegation that a new scheme prejudiced the rights of prospective pensioners.
• Pension board action for failure to file accounts on time.
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D&O (Directors & Officers) CLAIMS EXAMPLES
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• An Oireachtas enquiry for alleged collusion/price fixing into an Irish semi-state
body resulted in an Irish Company being obliged to attend the enquiry and
incur defence costs up to €250,000.
• A case of sexual harassment against a senior executive resulted in payment
to date of over €250k.
• Receiver taking commercial court action to recover €1m from 2 former
directors for alleged reckless and fraudulent trading. Liquidator application to
High Court to restrict the directors.
• A Shareholder action in the US against the individual directors/officers of an
Irish subsidiary accusing them of trading whilst insolvent resulted in a pay out
of €963,000.
• A high court action in Ireland claiming (among other things) breach of
contract, negligent misstatement and misrepresentation. The defendant
allegedly represented that they were going to purchase a web portal from the
plaintiffs. The defendants later did not proceed with the purchase with the
result that the plaintiff company became insolvent. The claim is for in excess
of €1,600,000.
• An Irish food company director was sued for breach of confidentiality after
providing a reference for an ex-employee, even though the terms of the exemployees
departure from the company were subject to a confidentiality
agreement. €35k settlement agreed with €250k costs.
• A site workman was killed when a building collapsed after the removal of a
load bearing wall – there were clear instructions to the effect that the wall
should not be removed and on this basis the director was not found liable in
court but the costs for the directors representations were in the region of
€25k.
• A minority shareholder of a foreign company in joint venture with an Irish
company tried to gain commercial advantage by accusing a majority
shareholder of repressing their rights. The minority shareholder brought
criminal proceeding against an individual director (€110,000 in defence
costs).
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CRIME CLAIMS EXAMPLES
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• A site manager for a construction company deliberately over-orders on
materials, which he justifies as parts needed/wastages etc. The additional
stock was then sold on by the employee for improper personal gain. Due to
stock rotation, and below standard quality checks, the fraud was not
discovered for many months.
• During a large construction project, a senior audit clerk with 25 years
experience sets up fictitious sub-contractors to which he debits regular
payments, which are supported by false invoices. Due to the complex nature
of the project, in which dozens of sub-contractors are used, the fraud is not
picked up for several years.
• A local and well-known charity often raised funds by the “Collection in a
Bucket” method. At the counting stage, an employee was discovered
misappropriating some of the funds for his own improper financial gain. It was
discovered the same employee was also diverting postal donations which
were being used to supplement a low income. Due to the trust apportioned to
the employee, and the nature of the organisation involved, no questions were
asked and the fraud went on for several months.
• A worker at a hostel falsifies nightly room letting reports to show less people
staying at one location. They then pocket the difference which was often in
cash and thereby difficult to highlight in any budget variances.
• An employee used company time to develop his own business. He placed
orders with his employer to his own company for €600k and never delivered
any goods.
• A breakdown in internal controls when a company accountant went on
maternity leave. The company employed a temporary accountant who was
able to misappropriate €100k.
• Patients in a residence for the ill gave their pension books to an employee
who misappropriated €100k.
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Below are some examples of claims that have occured under the various policy covers and extensions. Please clikc on the '+' beside the relevant heading for detailed examples.
| EPL (Employment Practices Liability) CLAIMS EXAMPLES |
• An individual award of €130,000 for an unfair dismissals case against an Irish
manufacturing company as the company failed to implement “any fair
disciplinary procedures”.
• An Irish labour court award of €508,000 to four female clerical workers denied
equal pay with their male colleagues for nine years.
• Following a decision by an equality officer, an Irish organisation is facing a bill
of almost €500,000 in back money to 186 part time female cleaners for
discrimination.
• An employee of an Irish company dismissed as the employer broke a prior
agreement to allow the employee work from home. Award of €52k.
• €90k awarded for a case of constructive dismissal against an Irish
newspaper.
• Irish financial institution settled a discrimination and sexual harassment claim
for €150k with costs of €120k prior to a ruling by the Officer of the Director of
Equality Investigation (ODEI).
• A claim against a Hospital for constructive Dismissal settled for €40k, with
costs of €21k.
• €56k for a checkout employee of a supermarket sacked after the company
wrongfully accused her of turning up for work smelling of alcohol.
• A claim for sexual harassment against an executive of a large Irish
organisation cost over €300k to investigate and defend, even though no
settlement or award was made.
• A barman who was terminated after being questioned following the
disappearance of some money. He sued for wrongful dismissal and was
awarded €35k plus costs by the High Court, principally as the company did
not follow proper disciplinary procedures.
• A case for retaliatory dismissal against an Irish Semi-State body following
racist comments settled for $78k damages, with $58k costs. |
| PTL (Pension Trustee Liabilty) CLAIMS EXAMPLES |
• Inadvertent payment of pension benefits to deceased employee’s mistress
rather than wife.
• Negligent advice to employee’s widow in relation to employee’s share option
scheme resulting in loss of benefits.
• Failure to maintain adequate supervision to prevent fraudulent withdrawal of
pension fund assets.
• Making of unauthorised loans which became irrevocable and caused loss to
the fund.
• Conflicts of interest between duty owed to the fund and to the employer
company following clawback of surplus by employer company.
• Sale of property in depressed market leading to fall in value of fund assets.
• Failure to ensure collection of contributions from employer company which
later went into insolvent liquidation.
• Action brought by dismissed accountant against trustees for calculating
pension incorrectly.
• Failure to monitor an outside fund manager’s poor performance leading to a
claim against the trustees.
• Transfer of assets to new scheme went ahead under the wrong rules with the
effect of reducing funds available to beneficiaries.
• Pensions administrator incorrectly advised employee regarding benefits due
on early retirement date. Employee resigned and set up his own business
taking out a loan in reliance upon anticipated income from the pension fund.
Trustees were unable to make the payments promised by the administrator
as they were outside the scheme rules. Trustees and administrators were
sued for loss due to financial commitments.
• Complaint made to Pensions Ombudsman alleging, among other things,
benefit improvements given to active members were greater than those given
to pensioners.
• Allegation that a new scheme prejudiced the rights of prospective pensioners.
• Pension board action for failure to file accounts on time.
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D&O (Directors & Officers) CLAIMS EXAMPLES
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• An Oireachtas enquiry for alleged collusion/price fixing into an Irish semi-state
body resulted in an Irish Company being obliged to attend the enquiry and
incur defence costs up to €250,000.
• A case of sexual harassment against a senior executive resulted in payment
to date of over €250k.
• Receiver taking commercial court action to recover €1m from 2 former
directors for alleged reckless and fraudulent trading. Liquidator application to
High Court to restrict the directors.
• A Shareholder action in the US against the individual directors/officers of an
Irish subsidiary accusing them of trading whilst insolvent resulted in a pay out
of €963,000.
• A high court action in Ireland claiming (among other things) breach of
contract, negligent misstatement and misrepresentation. The defendant
allegedly represented that they were going to purchase a web portal from the
plaintiffs. The defendants later did not proceed with the purchase with the
result that the plaintiff company became insolvent. The claim is for in excess
of €1,600,000.
• An Irish food company director was sued for breach of confidentiality after
providing a reference for an ex-employee, even though the terms of the exemployees
departure from the company were subject to a confidentiality
agreement. €35k settlement agreed with €250k costs.
• A site workman was killed when a building collapsed after the removal of a
load bearing wall – there were clear instructions to the effect that the wall
should not be removed and on this basis the director was not found liable in
court but the costs for the directors representations were in the region of
€25k.
• A minority shareholder of a foreign company in joint venture with an Irish
company tried to gain commercial advantage by accusing a majority
shareholder of repressing their rights. The minority shareholder brought
criminal proceeding against an individual director (€110,000 in defence
costs).
|
CRIME CLAIMS EXAMPLES
|
• A site manager for a construction company deliberately over-orders on
materials, which he justifies as parts needed/wastages etc. The additional
stock was then sold on by the employee for improper personal gain. Due to
stock rotation, and below standard quality checks, the fraud was not
discovered for many months.
• During a large construction project, a senior audit clerk with 25 years
experience sets up fictitious sub-contractors to which he debits regular
payments, which are supported by false invoices. Due to the complex nature
of the project, in which dozens of sub-contractors are used, the fraud is not
picked up for several years.
• A local and well-known charity often raised funds by the “Collection in a
Bucket” method. At the counting stage, an employee was discovered
misappropriating some of the funds for his own improper financial gain. It was
discovered the same employee was also diverting postal donations which
were being used to supplement a low income. Due to the trust apportioned to
the employee, and the nature of the organisation involved, no questions were
asked and the fraud went on for several months.
• A worker at a hostel falsifies nightly room letting reports to show less people
staying at one location. They then pocket the difference which was often in
cash and thereby difficult to highlight in any budget variances.
• An employee used company time to develop his own business. He placed
orders with his employer to his own company for €600k and never delivered
any goods.
• A breakdown in internal controls when a company accountant went on
maternity leave. The company employed a temporary accountant who was
able to misappropriate €100k.
• Patients in a residence for the ill gave their pension books to an employee
who misappropriated €100k.
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