Article 2:9 of the Dutch Civil Code · private assets · run-off
Directors' and officers' liability through Allianz
This insurance does not protect your company but you personally: with directors' and officers' liability, your private assets stand behind the claim, even where the company ceased to exist long ago.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
Work out for yourself what it would cost.
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An adviser checks whether the cover suits your activities
A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
A director is in principle not liable for the debts of the legal entity. If he breaks through that separation, the issue is personal liability. Internally that runs through Article 2:9 of the Dutch Civil Code, which requires the proper performance of duties towards the company itself. Externally it concerns improper management in the event of bankruptcy, prejudice to individual creditors, and tax and social security debts.
The insolvency administrator is the most common opposing party with this product. Article 2:248 of the Dutch Civil Code makes directors jointly and severally liable in a bankruptcy for the deficit where the management has been manifestly improper. If the accounts are not in order or the annual accounts were filed late, improper management is established and it is presumed to have been an important cause of the bankruptcy.
The policy mainly covers defence costs, and with this product those form the bulk of it: even a claim that is ultimately dismissed costs years of legal fees. We look at the group of insured persons, at the run-off period after resignation and at whether former directors and supervisory board members are insured as well.
Directors' and officers' liability through Allianz: what is covered?
The structure of the cover in three parts, with an overview per situation below.
Our role
Independent
We are not tied to any single company.
Several providers compared
Advice follows your situation
AFM licence 12016589
When taking out cover
What we do
From assessment to policy.
Matching cover to your work
Conditions side by side
Switching, including cancellation
After that
In the event of a claim
What really matters.
Notification and guidance
Assessing a rejection
Objection where necessary
What is covered
What we look at
Explanation
Does the cover suit your activities
Yes
Sum insured and excess
Yes
Exclusions and clauses
Yes
Fit with your other policies
Yes
Premium in relation to the conditions
Yes
Comparing on premium alone
No
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
The insolvency administrator looks at the accounts and the filing
In a bankruptcy, the insolvency administrator investigates as a matter of course whether the bookkeeping was adequate and whether the annual accounts were published on time. If they were not, Article 2:248 of the Dutch Civil Code creates a presumption that the directors have to rebut. That is a heavy evidential position and the reason why these files take so long. The insurance then pays for the defence, even where liability is ultimately not established.
Tax debts and the notification of inability to pay
If your company cannot pay wage tax, VAT or pension contributions, this must be notified to the tax collector in good time. If that notification is not made, it is presumed under Article 36 of the Dutch Tax Collection Act that the failure to pay is due to improper management, and the director can hardly escape it. This is the best-known pitfall and it lies in the administrative routine, not in the strategy.
Who exactly is insured
Alongside statutory directors, supervisory board members, supervisors and de facto policymakers are often insured as well, and sometimes the director of a subsidiary too. With a foundation or association it concerns the entire board, even where it is unpaid. We check whether the group of insured persons covers your whole structure, including the holding company, and whether directors who resign remain covered by the policy for their earlier decisions.
Outside the cover
Excluded are intent and fraudulent conduct, personal gain and the repayment of remuneration received without entitlement; administrative fines are generally not insurable either. Liability for professional errors does not belong here but on the professional indemnity insurance, and damage to property or persons on the public and employers' liability insurance. Claims by one insured person against another are also often limited.
What does your premium depend on?
Legal form and group structure. A foundation with an unpaid board is assessed differently from a holding company with several operating companies.
Balance sheet total and solvency. The financial position determines the chance of bankruptcy and therefore of a claim from an insolvency administrator.
Number of directors and supervisory board members. Every insured person widens the group within which a claim can arise and counts in the assessment.
Sum insured per year. The limit usually applies to all directors together, including the defence costs that eat into the sum insured.
Activities abroad. Foreign subsidiaries or shareholders bring different company law and a different claims climate with them.
Recent acquisitions or reorganisations. Mergers, the sale of business units and rounds of redundancies are the moments at which claims arise.
Insurers weigh these details differently. That is where your saving is.
How we arrange it
You request a quoteWe take stock of your activities, turnover and wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
Yes. Directors' and officers' liability is personal liability: if it is established, the claimant recovers against your own assets, including savings and the equity in your home. The legal entity then drops out of the picture, often because it is bankrupt. That explains why directors of small companies and of foundations weigh this risk more heavily than the size of their organisation might suggest.
I have resigned. Can I still be held liable?
Certainly. Liability follows the period in which you were a director, not the period in which you still are. An insolvency administrator can come knocking years after your departure about decisions from your term. So check whether the policy continues to cover former directors and what run-off period applies if the company stops the insurance, because your protection then lapses without your having any influence over it.
We are a foundation with volunteers on the board. Is this necessary?
Serving unpaid does not limit liability. A foundation board too must keep the accounts in order, must not enter into obligations the foundation cannot meet, and must notify tax debts in good time. With foundations that have staff, subsidies or property, the amounts involved are not small either. Volunteers in particular are rarely willing to bear this risk privately, which leads board members to step down.
What happens to the costs if the claim turns out to be unfounded?
They make up the largest part of the claims burden. Defending against a claim by an insolvency administrator runs through a writ of summons, written pleadings and often an appeal, with expert investigation of the accounts. The policy pays those costs within the sum insured, even where you are fully vindicated. Note that defence costs usually eat into the limit rather than coming on top of it.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
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