Directors' & Officers' Liability:
Whether your organization is publicly traded, private, or non-profit, your directors and officers are exposed to a number of liabilities. In the performance of their ongoing organizational duties, they can be held personally liable for both damages and defence costs.
According to the 2004 Canada Survey on “Giving, Volunteering and Participating” about 36 percent of Canadian volunteers serve on boards and committees. Despite their commitment to countless causes and organizations many board members may be unaware of the legal ramifications of their volunteer work and the possibility of being held personally liable. This liability applies to all non-profit organizations including clubs, associations, societies, leagues committees and charities.
The basic responsibility of directors is to represent the interest of the organization, their members and their constituencies in directing the affairs of the organization, and to do so within the law. In their role as “trustee”, directors have three basic duties:
DILIGENCE to act reasonably, prudently, in good faith and with a view to the best interests of the organization and its members.
LOYALTY to place the interests of the organization first and to not use one’s position as a director to further private interests.
OBEDIENCE to act within the scope of the governing policies of the organization and within the scope of the other laws, rules and regulations that apply to the organization.
A volunteer director who fails to fulfill his or her duties as outlined above may be liable.
The term ‘liability’ refers to the responsibility of directors and organizations for the consequences of conduct that fails to meet a pre-determined legal standard. Usually, the term “consequences” refers to damage or loss experienced by someone, and being responsible for such “consequences” can mean having to pay financial compensation.
Directors and officers may be held personally liable for claims arising from:
Examining a situation and asking what can go wrong and what harm could result
Identifying practical measures that can be taken to keep such harm from occurring; and
If harm does occur, identifying the steps that can be taken to lessen the impact of harm and pay for any result damage or losses.
The cost of defending these types of claims can be significant, and could very well impact the financial viability of your organization.
At Aaxel Insurance Brokers Ltd., we understand the issues and challenges organizations face when it comes to director and officer liability. We partner with well-respected insurance carriers to deliver a program that will appropriately protect the personal assets of your Directors and Officers. And that allows them to focus on the important task of helping your organization succeed.
Want to know more about D&O? Click Directors & Officers Liability Disclaimer
Contact Us
We'd be happy to provide more information about our Directors and Officers insurance. Please contact:
Paul Mann
P-905-796-7600 xx27
TF-1-866-358-2860
paul.mann@aaxelinsurance.com
According to the 2004 Canada Survey on “Giving, Volunteering and Participating” about 36 percent of Canadian volunteers serve on boards and committees. Despite their commitment to countless causes and organizations many board members may be unaware of the legal ramifications of their volunteer work and the possibility of being held personally liable. This liability applies to all non-profit organizations including clubs, associations, societies, leagues committees and charities.
The basic responsibility of directors is to represent the interest of the organization, their members and their constituencies in directing the affairs of the organization, and to do so within the law. In their role as “trustee”, directors have three basic duties:
DILIGENCE to act reasonably, prudently, in good faith and with a view to the best interests of the organization and its members.
LOYALTY to place the interests of the organization first and to not use one’s position as a director to further private interests.
OBEDIENCE to act within the scope of the governing policies of the organization and within the scope of the other laws, rules and regulations that apply to the organization.
A volunteer director who fails to fulfill his or her duties as outlined above may be liable.
The term ‘liability’ refers to the responsibility of directors and organizations for the consequences of conduct that fails to meet a pre-determined legal standard. Usually, the term “consequences” refers to damage or loss experienced by someone, and being responsible for such “consequences” can mean having to pay financial compensation.
Directors and officers may be held personally liable for claims arising from:
- Activities of volunteers and/or staff in the name of the organization
- Employee discrimination
- Wrongful dismissal
- Breach of duties as described previously
- Volunteers
- Employees
- Government bodies
- Suppliers
- Customers
- General public
Examining a situation and asking what can go wrong and what harm could result
Identifying practical measures that can be taken to keep such harm from occurring; and
If harm does occur, identifying the steps that can be taken to lessen the impact of harm and pay for any result damage or losses.
The cost of defending these types of claims can be significant, and could very well impact the financial viability of your organization.
At Aaxel Insurance Brokers Ltd., we understand the issues and challenges organizations face when it comes to director and officer liability. We partner with well-respected insurance carriers to deliver a program that will appropriately protect the personal assets of your Directors and Officers. And that allows them to focus on the important task of helping your organization succeed.
Want to know more about D&O? Click Directors & Officers Liability Disclaimer
Contact Us
We'd be happy to provide more information about our Directors and Officers insurance. Please contact:
Paul Mann
P-905-796-7600 xx27
TF-1-866-358-2860
paul.mann@aaxelinsurance.com
