You always have to strike a balance, in the field of liability, between the risk that the organisation itself accepts and covers by appropriate conduct, and the risk that has to be transferred to third parties due to a legal duty or because it is a threat to continuity.
Raetsheren’s approach, of always first gaining a deep knowledge of the market and the ambitions of organisations, ultimately brings big advantages in this respect. Not only from the perspective of awareness and how you go about things, but also with regard to cost. Striking the right balance between prevention and insurance – that is our contribution.
Over recent decades, there have been changes in the laws and regulations, and in the thinking about governance. The result has been that liability has increasingly come to lie with the board members of businesses and organisations. Add to these increasing internationalisation, media attention and growing claim-awareness among shareholders and stakeholders, and board members’ liability has become a fundamental risk for organisations – and for the board members themselves, whose private assets may be at stake.
The risk can be insured against, offering broad coverage which might, for example, also cover legal costs. However, the issue is that such insurance might affect the conduct of board members, who could interpret the fact of being insured as giving them excessive freedom of action in business (the ‘moral hazard’). The balance between insurance and personal responsibility is unique in each situation, and needs to be manifested in the form of a carefully considered solution.
Raetsheren is highly specialised in this subject matter. On the one hand, we know the markets in which our clients operate; on the other hand, we know the possibilities of the solutions and constellations on offer, and have years of experience in the subject. Liability insurance for board members is such bespoke work that we always start by getting personally acquainted. To do this, please feel free to contact our office and speak to one of our specialists.