Executive boards, supervisory boards and managing directors are subject to a substantial risk of personal liability. With the help of suitable legal advice and experience, it is possible to reduce this risk.
In addition to bearing a high degree of responsibility, the executive bodies of a company are also faced with a substantial risk of personal liability. Mere negligence may be sufficient to give rise to claims for compensation or damages claims against executive boards, supervisory boards or managing directors, with managers potentially being faced with claims both from the company as well as damages claims brought by third parties.
That being said, there are effective preventative measures that can be taken to reduce this risk of liability. The law firm GRP Rainer Rechtsanwälte has the legal expertise and requisite experience to mitigate these personal liability risks of executive bodies. Apart from preventative counselling, it is also possible to reduce the risk of liability when drafting employment or service contracts as well as when preparing company bylaws. Another significant step is to set up an efficient compliance management system and take out a carefully designed D&O insurance policy.
In order to establish an effective compliance management system (CMS), it is necessary to carry out a specific risk analysis to prevent damage or loss being caused by executive employees and the company. In doing so, it is important to ensure that the CMS is tailored to the requirements of the company in question. The effectiveness of the CMS needs to be reviewed regularly and the system adapted to new requirements.
It is equally important for a D&O insurance policy to always be tailored to individual needs and specific liability risks if it is to cover the key factors in the event of a claim. Care must be taken here to ensure that the insured sum is high enough and that both retroactive coverage and cover for follow-up liability are included in the policy. The D&O insurance policy should also cover both internal and external liability. All of the necessary issues should therefore be clarified and the risks evaluated before taking out the policy.
In this way, the lawyers at GRP Rainer who are experienced in the field of company law can take preventative measures to ensure that the risks faced by managers are considerably reduced. If claims are nonetheless brought against executive boards, supervisory boards or managing directors, all legal means of action can be taken to see off these claims. Conversely, it is, of course, also possible for claims to be asserted and enforced against executive bodies.
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