How much cover is enough?

The handful of insurance companies (QBE, HIH, American Home Assurance, ACE and GIO) that specialise in litigation insurance can generally provide as much cover as companies want on two primary policies:
? Directors and Officers Liability Insurance: Covers for wrongful acts or breaches to fiduciary duties. As general rule, directors and officers of publicly listed companies are more exposed to risk than their private company counterparts.
While most companies provide between $20 million and $40 million per claim, multinationals (like Carter Holt Harvey and Fletcher Challenge) that also risk being sued outside New Zealand, buy as much as $100 million (per claim) for their directors and officers.
? Statutory Liability Insurance: Covers fines and penalties imposed by the Labour Department, Commerce Commission, local authorities and other statutory bodies. As blanket cover, this insures all employees against any allegations of breaches to statutory regulations. Most companies insure for up to $500,000 (per claim).
Results from PricewaterhouseCoopers (Directors Fees 1999) survey show that 92 percent of the companies paid for or reimbursed their directors for special liability insurance coverage, up from 68 percent of companies surveyed five years ago.

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