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27 March 2022

 Discharge and Insurance

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Introduction

Directors and officers are exposed to the risk of liability when engaging in their formal duties as a part of the management of the company and the number of liability cases against directors and officers. Many companies have taken out a directors and officers’ insurance (“D&O Insurance”) to cover the risk associated with the management profession. Over the years, Moalem Weitemeyer has been involved in several liability cases, where claims have been raised against the management of companies. When representing management, in practice this is often done in close collaboration with the management member's insurance company.

Recent developments in the D&O Insurance market have, however, made it more difficult for companies to take out the D&O Insurance with adequate coverage at acceptable premiums. Accordingly, an increasing number of companies have resolved to indemnify the management for claims against the management, either on its own or as a supplement to a D&O Insurance.

 The development in the prices and coverage of D&O Insurances has, over the past two years, caused 12 out of the 24 listed companies in the Danish C25 index to indemnify the management for claims.

 In this newsletter, we will look into the implications of such indemnification, including the requirements for establishing indemnification and other remedies available. The newsletter will first provide a brief overview of the general duties and obligations of the management. Afterwards, the newsletter will examine the possibilities of establishing indemnification and its consequences.

Thomas Weitemeyer

Managing Partner

+45 30 37 96 90

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Søren Bech

Associate

+45 30 37 96 17

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