Corporate and insurance law

Abstract

The purpose of this chapter is none other than to assess from the angle of Directors’ and Officers’ Liability Insurance to what extent the VW investigations and admissions of liability could affect the D&O insurance market. There are several scenarios that, in one way or another, will impact D&O insurance for example: company’s liability for breaching anti-pollution rules, directors’ liability to the company for breach of directors’ duties, class actions against VW by consumers, class actions against VW by company shareholders and investors, actions against directors by third parties, actions against directors by environmental agencies, regulatory investigations, product recall, to say nothing of one of the most neuralgic areas ‘Defence Costs Cover’. Arguably, the German two-tier board system will soon be providing answers should the supervisory board decide to bring proceedings against the executive directors of VW. On the other hand, the UK D&O market is still attentive and awaits further developments. This chapter aims therefore to provide some responses to the proper construction of a D&O policy and assess whether the liabilities incurred by potential VW wrongdoers are covered under standard insurance wordings of this type.