Towards the legal entity
- Improper performance of duties, Article 2:9 of the Dutch Civil Code
- Decisions taken without proper investigation
- Exceeding powers under the articles
- Claims by fellow shareholders
Directors' and officers' liability in property and real estate
Anyone who manages a property BV, a management foundation or a VvE board can be held personally liable for loss. It is then not the company that pays, but the director himself, out of his private assets.
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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.
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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
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In brief
A director of a legal entity must perform his duties properly. If he fails to do so and is seriously at fault for that, he is liable towards his own company under Article 2:9 of the Dutch Civil Code. With property that means, for example, a purchase without proper investigation, financing out of proportion to the cash flow, or deferred maintenance that later leads to substantial loss.
Then there is liability towards third parties. If the company goes bankrupt and there has been manifestly improper management, the insolvency administrator can hold the directors jointly and severally liable for the deficit in the estate under Article 2:248 of the Dutch Civil Code. If the accounts are not in order or the annual accounts were filed late, it is established that the board performed its duties improperly and this is presumed to have been an important cause of the bankruptcy. The director must rebut that presumption himself.
Claims arise without a bankruptcy too: from tenants, buyers, financiers, fellow shareholders or from the Belastingdienst where inability to pay was not notified in time. The same principle applies to VvE boards, with the division regulations and the obligations around the reserve fund on top. See also the version for VvEs.
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What does directors' and officers' liability insurance cover?
The policy covers the personal liability of directors, supervisory board members and supervisors, plus the cost of defence.
Towards third parties and the insolvency administrator
Claims from outside: tenants, financiers, suppliers or the estate.
- Manifestly improper management, Article 2:248 DCC
- Tort, Article 6:162 of the Dutch Civil Code
- Claims from tenants or buyers
- Tax liability, within limits
Defence and assistance
The costs of fending off a claim, even where it ultimately proves unfounded.
- Legal and court costs
- Assistance with an investigation or inquiry
- Costs in an investigation by an insolvency administrator
- Usually within the sum insured
What is covered
| Situation | Basic | Extended |
|---|---|---|
| A claim by the company against the director | Yes | Yes |
| A claim by the insolvency administrator after bankruptcy | Yes | Yes |
| Defence costs for an unfounded claim | Yes | Yes |
| Liability of a former director after resignation | Provided that | Yes |
| A claim about facts from before the start date | No | Provided that |
| A fine imposed on the director personally | No | No |
What is actually covered, including the exclusions, the sum insured, the retroactive date and the run-off period, is set out in the policy conditions and the insurance card (verzekeringskaart) that you receive before you take out the policy.
What does your premium depend on?
- Balance sheet total and property portfolio: size of the assets invested
- Number of entities and directors: more legal entities, wider risk
- Level of gearing: high leverage increases the risk of bankruptcy
- Sum insured: a higher limit means a higher premium
- Retroactive date: going further back costs more
- Financial position and history: annual figures, earlier claims and notifications
Insurers weigh these details differently. That is where your saving is.
How we arrange it
- You request a quoteWe take stock of your situation, risk 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.
Why arrange it through Finass Verzekert?
We look at the terms as well as the premium, and stay your point of contact when there is a claim.
Independent
We are not tied to one insurer and compare on the basis of an objective analysis of several companies.
One fixed adviser
You call or email someone who knows your file. No menu options, no changing call centres.
Switching without hassle
We cancel your old policy and align the start date, so you are never a day without cover.
Help with claims
We report the claim and monitor how it is handled. In urgent cases you can reach us on the emergency line.
9.5New policy
9.8Claims handling
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.
Where things go wrong in practice
Four points that determine whether the policy actually protects the director.
It is your private assets that are at stake
The liability of a director is personal liability. The legal entity is in principle out of the picture. The claim reaches your own savings, home and pension. With several directors, the liability under Article 2:248 of the Dutch Civil Code is moreover joint and several: whoever has the most to take from is approached first. A former director can also still be held liable years after his departure, and in a property structure that applies equally to the director of an intermediate holding company.
Make sure all entities are on the policy
Property is rarely held in one BV. A structure with a holding company, several property BVs, a management company and sometimes a foundation is usual. The policy only covers the legal entities that are actually insured. If you set up a new entity or buy an existing BV, report it; otherwise the director of that entity is without cover. Also watch out for outside positions, for example a seat on a VvE board or in a client account foundation.
What is not included
The following, among others, are outside the cover: deliberate prejudice of creditors, fraud and self-enrichment, generally only definitively excluded once that has been established beyond appeal; intent and wilful recklessness under Article 7:952 of the Dutch Civil Code; fines and penalty payments imposed on the director personally and not insurable under Dutch law; and claims arising from facts that predate the cover period or that were already known when the policy was taken out. Injury and property damage also fall outside it. That is the territory of the liability insurance for the property itself.
Claims-made, with retroactive and run-off cover
The policy works on a claims-made basis: what is decisive is the moment at which the claim is brought and notified, not when the act of management took place. When you take out the policy you therefore need retroactive cover for the past. On termination of the policy, the sale of the company or resignation the reverse applies: without run-off cover, a claim coming in afterwards is no longer insured. Report a circumstance that may lead to a claim in good time; Article 7:941 of the Dutch Civil Code requires you to do so.
Frequently asked questions
This is what people ask us most.
Am I not protected as a director by the BV?
For ordinary business risks you are: the company bears its own obligations. That protection falls away as soon as you are personally seriously at fault. You are then liable under Article 2:9 of the Dutch Civil Code towards the company, or through Article 6:162 DCC and Article 2:248 DCC towards third parties and the insolvency administrator. The claim then bypasses the BV and reaches your private assets.
What does manifestly improper management mean?
Management in which no reasonably minded director would have acted in that way in the same circumstances. In a bankruptcy the insolvency administrator can claim the entire deficit in the estate under Article 2:248 DCC. If the duty to keep accounts has been breached or the annual accounts were filed late, improper management is established and this is presumed to have been an important cause of the bankruptcy.
Does this apply to a VvE board too?
Yes. A VvE is a legal entity and its directors have the same duty to perform their tasks properly. Think of failing to adopt a long-term maintenance plan, a reserve fund that is not topped up or ignoring the division regulations. With a board of volunteers drawn from the members themselves that weighs all the more, because they are rarely legally trained and yet remain personally answerable.
I am resigning. Do I remain liable?
Yes, for your conduct during the period in which you were a director. Resigning or being removed from the Chamber of Commerce register does not erase that liability. Because the policy works on a claims-made basis, the question is above all whether there is still cover at the moment the claim comes in. Arrange run-off cover or check whether the company's continuing policy includes former directors.
Does the policy cover a tax debt as well?
In part. Where inability to pay is not notified in time, the Belastingdienst can hold you personally liable. The costs of defence and sometimes the liability itself can fall under the policy. The company's own tax debt does not, and neither do fines. So always notify inability to pay within the statutory period.
Every situation is different. For these situations we have a separate page.
- Compare directors' and officers' liability insuranceThe main page
- Directors' and officers' liability insurance for your companyArticle 2:9 of the Dutch Civil Code, personal liability, defence costs
- Directors' and officers' liability insurance for property and real estatePersonal liability, Article 2:248 of the Dutch Civil Code, defence costs
- Directors' and officers' liability in a property structureArticle 2:9 of the Dutch Civil Code, joint and several, private assets
- Directors' and officers' liability insurance through Hienfeld
Read more
Within Bestuurdersaansprakelijkheidsverzekering
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About our service
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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This page was compiled by Finass Verzekert. Last updated on .
The information on this page is general in nature and is not personal advice.