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

Three Years running - Insurance Brokerage of the Year 1 to 5 staff

Mandy and Robert Cooper were extremely honoured and astounded to once again win, Insurance Brokerage of the Year for 2020 from Insurance Business Australia magazine. This is the third year running.

While this year has not been the easiest of years for the business with Covid 19, the Recession, the hard market and issues at Lloyds of London, we are literally all in this together as an Insurance Industry.

CPR Insurance Services continues to make our clients the number one focus of our business while managing our relationships with Insurers, who we need more than ever in this market climate.

CPR Insurance Services are a highly ethical Brokerage with a reputation as a trusted advisor who always acts in the Client's best interests. Their experience, knowledge and expertise is amongst the highest in the industry.

CPR Insurance Services is now ten years old as a business and is proud of being an Authorised Representative of Ausure and their partnership with Steadfast, giving CPR the strength and backing to match it with any Broking firm in the Insurance Industry, but remain focussed on supporting the Small to Medium business segment.

Memberships of the National Insurance Brokers Association, Australia and New Zealand Institute of Insurance and Finance, Australian Insurance Law Association, Australian Professional Indemnity Group and the Australian Institute of Company Directors, ensures CPR Insurance Services maintains the high standard of knowledge and expertise required to be one of the best Brokerages in Australia.

CPR Insurance Services also plays a strong role in their local community supporting other Sporting Clubs and Community organisations. They also support and promote local businesses with their operation of the Kedron Brook Business Group who meet regularly and has 174 members.

We are truly honoured to receive this National award once again for the third year as a recognition of CPR Insurance Services contribution.

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Finalist for QLD Broker of the Year

Robert Cooper was honoured to be nominated as a finalist for Queensland Insurance Broker of the year for 2020, as part of the National Insurance Brokers Association. Unfortunately he missed out on the ultimate award but is a reflection of the high standard that the industry now has for such awards.

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