CORPORATE GOVERNANCE CRISIS
Scandals wreak havoc with directors’ insurance costs
In another sign of the cost of the corporate governance crisis engulfing SA, it is becoming more expensive to insure the country’s directors after scandals from Steinhoff International’s collapse to state capture allegations eroded trust. Teri Solomon, head of financial and professional practice at Marsh, the world’s largest insurance broker, said the cost of directors’ and officers’ liability insurance was doubling or tripling annually in some cases. "Some clients are seeing increases of 100% to 200%, while others have had increases of just 10%," Solomon said. Legal defence "Generally, D&O [directors’ and officers’] insurance covers losses caused by negligence or unintentional wrongdoing by directors or officers, but does not extend to directors that have been proven to have acted unlawfully or with gross negligence," Solomon said. The insurance typically extends to covering the cost of the directors’ legal defence in the event they are sued personally. While some of the increases ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.