Directors’ liability insurance is an important tool for ensuring stability and security for both the directors and the company as a whole. Companies that provide D&O insurance demonstrate a high level of corporate governance and care for their directors.

On 14 June, experts of the Corporate Governance Professional Association (CGPA) held a roundtable discussion on “Liability Insurance for Board Members” as part of the Corporate Director Program, during which they discussed the challenges and prospects of liability insurance for board members in Ukraine with leading experts of the insurance market, in particular: Oleksiy Pylypenko, Colonnade Insurance Company, Kostyantyn Babaskin, VUSO Insurance Company, and Yulia Shubert, Aon Company.

The moderator and speaker was Volodymyr Igonin, CGPA’s Board of Directors member and Vasil Kisil & Partners partner. Volodymyr began the event by defining the liability of the boards of directors of companies that should be insured and what the members of the boards of directors are responsible for. In this case, we are talking about fiduciary duties, which mean that members of the board of directors are officers of the company who must act in the interests of the company and its owners in good faith and reasonably within the scope of their powers under the charter and the law to achieve the company’s objectives, avoiding conflicts of interest.

Liability insurance in Ukraine is a very young type of insurance that became popular in the 21st century. Insurance market experts have indicated that there are currently up to 200 liability insurance contracts in Ukraine. Only three insurers in Ukraine have liability insurance in their portfolio, and very often, the risks are reinsured in London if the level of coverage of the national insurer does not satisfy the clients, who believe that their risks are higher.

Insurance for the financial sector is typically more expensive, while manufacturing companies enjoy more affordable rates. Interestingly, the liability insurance of officials of state-owned companies is expensive both in Ukraine and in the European markets. However, the presence of an expatriate on the supervisory board can significantly lower the price of insurance. This underscores the value of diverse perspectives in risk assessment, potentially reducing costs for companies.

If you are interested in learning more and hearing interesting cases, please follow the link: https://youtu.be/9LUEsQnZATc, follow CGPA announcements, join the following events and participate in training programs.