Supplementary Legal Expenses

Supplementary Legal Expenses Insurance for Directors & Officers

There are Legal Expenses products designed to be offered in conjunction with an existing Directors & Officers Liability insurance policy.  Through a 'difference in conditions' coverage this cover is able to provide legal expenses cover for exposures traditionally excluded by stand alone Directors & Officers policies.

There are many benefits of having a supplementary Legal Expenses Policy for the gaps in a standard Directors and Officers Liability policy that are normally excluded particularly in the area of:

  • Bodily Injury (i.e. occupational/ workplace health & safety legislation)
  • Pollution (i.e. environmental legislation)
  • Insured vs Insured (i.e. disagreements at board level)

 

Organisation vs Insured

“Organisation v. insured' claims are generally excluded by the traditional D&O Policies. A new board of directors may bring an action in the name of the company (derivative action) against a former board member in relation to an alleged failure to act with care and diligence in managing the company.

 

Substantial Shareholder Claims

Traditionally, overlying D&O Policies have a limitation placed on actions brought by shareholders (e.g. shareholders owning >15% of the organisation's shares). A 'substantial shareholder' may make a claim against several directors in respect of the mismanagement of the company. The legal costs to defend such an action would otherwise not be covered without a SLE Policy.

 

Government Agency Inquiries or Investigations

Companies and their employees can be directed to appear at various inquiries or investigations. Entirely innocent parties are frequently compelled to attend an inquiry simply to assist in the evidence gathering process (often at substantial legal costs for which they otherwise have no insurance protection.

An area which receives a great deal of attention is the onerous obligations placed on employers in relation to occupational health and safety exposures. It is not uncommon for companies to be investigated by the relevant State/Territory workcover authority when a worker is injured at the workplace. Companies can incur significant costs in responding to or defending any investigation, inquiry or prosecution.

Examples of such inquiries include:

  • Royal Commission: Ambulance service emergency response call frequency
  • Australian Broadcasting Inquiry: Independence in advertising
  • Australian Securities and Investment Commission: Mortgage industry & secret commissions
  • Australian Securities and Investment Commission: Financial advice and real estate agents
  • Royal Commission into the Building & Construction Industry: Building industry integrity

 

Board Disputes

Internal board disputes are traditionally excluded by a D&O Policy's Insured v. Insured Exclusion. For example, a defamation action is brought by one director against another in respect of alleged defamatory remarks made by the latter director at an industry function concerning the level of board input by the former director.

 

Claim Examples

  • An employee suffers a serious injury and the employer organisation has breached Workplace/Occupational Health & Safety law. An investigation is conducted by the regulatory authority which costs the employer organisation $50,000 + in legal fees to respond to the alleged breach.
  • The State coroner conducts an inquiry into the death of an electrical apprentice who dies from third degree burns after lifting himself into powerlines in a cherry picker. The employer organisation is directed to appear at the inquiry.
  • A theme park is charged as a result of an accident where a riderless jet ski left the water and ploughed into an audience injuring four people. Investigation and defence costs are incurred.
  • A snack food manufacturer incurs significant legal costs following a charge by Workcover in the NSW Industrial Relations Commission in respect of a worker losing an arm after being dragged into the rotating blades of a dough cutting machine.
  • A prominent luxury car dealer is prosecuted following the electrocution and death of an employed panel beater when he tried to fix a faulty spot welder.
  • A disabled employee brings an action against the company under the Disability Discrimination Act 1992 for failing to ensure adequate access to a meeting room which was required to assist the employee to carry out their activities as an employee. The action commencedwhen the employee was demoted to a position which did not require access to a meeting room. 

Latest News

Robert Cooper - one of 100 faces of small business

This week it was announced as part of Small Business Week,  that Robert has been named one of the 100 faces of small business for a State Government promotion on the great value that small businesses play in the State of Queensland.

You can see Robert's entry here:

It is the third accolade for CPR Insurance Services in a month and after seven and a half years in business is a real pep up for the company.

For Robert, it is the culmination of many years experience, becoming well qualified, experiencing the highs and lows of a career and always wanting to contribute to his community. Sometimes, these things just come together and you receive recognition for your efforts.

Robert says that there is no doubt that starting your own business is a huge challenge, but with the right research and planning, the right people around you and a good set of values that you apply to the vision of the company, you have a very good chance of making it all succeed.

Robert says he is lucky. He has a strong supportive Wife, Mandy, who is also part of the business, along with efficient and hard working staff such as Julia McLauchlan and Aidan Harmer who are building up their own skills in a learning environment. 

However, the most important and most supportive people for CPR Insurance Services are our clients who have stuck by us and supported us over the past seven years. Our focus remains on providing the best possible service we can and always acting in their best interests. To all our clients, we say thank you!

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CPR Insurance wins Brokerage of the year

CPR Insurance Services picked up the award for the Best Brokerage (1-5 staff) in Australia, last Friday Night (4th May 2018) at the Insurance Business Magazine Awards held at the Westin in Sydney.

Judging came from various parts of the industry. It is a great honour to be recognised for our hard work and particular Business values we follow. A full list of winners is listed here.

Success comes from having great staff, and we thank Aidan Harmer and Julia McLauchlan as important support staff for helping us win such an award.

CPR Insurance has been in operation for more than 7 years now and is only successful because of the wonderful support from our staff, insurers and most importantly, our fantastic clients who put their faith and trust into our company to be their Risk Advisers and Brokers. 

Thank you to all.

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