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Directors and officers liability insurance (also written directors' and officers' liability insurance; [1] often called D&O) is liability insurance payable to the directors and officers of a company, or to the organization itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for ...
A number of legal systems make provision for companies trading while insolvent to be unlawful in certain circumstances, and provide for directors to become personally liable for a company's debts if they have acted improperly. In most legal systems, the liability in respect of unlawful transactions only extends for a certain period of time ...
Morton v Douglas Homes Ltd has become an important case in New Zealand, as a result of the leaky homes crisis.The salience of the case comes from the fact that Justice Hardie Boys held the directors of a building company personally liable for damage caused by defective foundations. [1]
(7) A provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director: (i) For any breach of the director's duty of loyalty to the corporation or its ...
Directors of the company are prohibited from acting in their capacity as directors for the duration of the administration, while administrators are personally liable for any debts incurred by the company in the course of the administration.
Trevor Ivory Ltd v Anderson is one of the leading New Zealand cases regarding the personal liability of company directors. The case concerns the personal liability of a director of a one-man company for negligent misstatement and applied the principle of Tesco Supermarkets Ltd v Nattrass that where a director is the "directing mind" of a company, his actions are legally those of the company.
Finally, the last major category relates to holding directors and officers personally liable for actions taken by the company, as seen in piercing the corporate veil. Overall, as businesses get larger and more successful, their chances of liability lawsuits increase, but small businesses are not completely immune to them.
This case preceded ss 40-1 of the Companies Act 2006, which give directors unlimited capacity to bind the company with those dealing in good faith; but if an action by a director is beyond their authority or in breach of some fiduciary obligation, then they can be made personally liable. Arguably therefore, Blaikie Bros would now have been able ...