Managers' errors, insured for at least 10,000 euros

Companies are going to rush and get professional liability insurance policies for managers in the wake of EU integration as company managers’ responsibilities will grow, insurance market players estimate. This type of insurance covers financial losses caused by managers and CEOs to shareholders, investors and third parties including employees, as a result of wrong management decisions. The market of professional liability insurance for managers will receive a considerable boost because of the stipulations included in the draft to modify the law on trading companies, saying, “the members of the board of directors should fulfil their mandate with the caution and diligence of a good administrator,” which could prompt heads of companies to get professional liability insurance policies. Only several dozen companies in Romania have so far got such insurance (Directors&Officers Liability or D&O), while in countries such as the US, Canada or EU member states all the major companies hold such policies. Premiums for these policies range from tens of thousands of euros to one hundred thousand euros and the amounts insured start from one million euros and may go to as much as ten million euros.