Talanx : Protection for decision-makers

28 March 2017

There are many different types of manager risks and they are very wide-ranging - mistaken assessments and errors are easily made. The personal consequences for the individual are then often serious. Financial Lines at HDI Global SE, the industrial insurer of the Talanx Group, offers industrial and corporate clients and their managers numerous insurance solutions designed to protect decision-makers, such as D&O coverages (Directors & Officers) and legal protection policies. Defence against cyber risks is also included.

Entrepreneurial decisions are part of day-to-day business for managers. Company leaders have to engage with a high level of compliance requirements, assess complex situations and take account of many different legal jurisdictions. There is an increasing trend for all this to take place in the international context. Foreign legal systems, cultures and customs generate additional difficulties for reaching decisions. The consequence is that managers are subject to an ongoing risk of making the wrong decisions and acting incorrectly. 'Decision-makers in the company are increasingly being held responsible in these situations,' commented Stefan Sigulla. The HDI Board Member highlights the rising number of financial losses in the context of D&O insurance over a considerable period of time.

'Owing to extensive reporting in the media and networks about a large number of different claims, ranging from claims for damages to criminal investigations, the perception of personal risks among managers has recently undergone a perceptible increase,' added Heiko Würtz and highlights to the personal risks for the affected persons. As Head of Executive Protection in the Financial Lines Division at HDI, he is responsible for insurance of the occupational risks of decision-makers.

Criminal legal protection is gaining importance
There are many different risks for managers and they are frequently wide-ranging, as demonstrated by a number of case studies. One example: A managing director makes use of some subsidies, but inadvertently uses them for the wrong purpose. As a result of the request for repayment of funds by the European Union, a claim is made against the manager requesting compensation for the financial loss that has arisen. The decision-maker may have to foot the bill for this from his own private assets. Another example: A state prosecutor institutes criminal proceedings against a manager. The suspicion is that he may have bribed an employee of a foreign testing agency to ensure that the company receives the necessary licence for a new product. The suspect is also confronted with the possibility of significant fines. 'Particularly in regard to compliance issues, criminal legal protection has gained significantly in importance,' emphasised Würtz.

'Their function and remit turns managers into entrepreneurs. They make use of the opportunities on offer and they need to enter into the risks that can be ring-fenced but not entirely avoided,' explained Stefan Sigulla. As a consequence, they require individual protection with individual cover. These are precisely the core benefits provided by Financial Lines. Apart from managers' liability, this area is also particularly concerned with criminal legal protection insurance. Depending on the product solution, the focus of attention may be on the assessment of compensation for damages, and consequent acceptance of or defence against such claims, cover for the risks of financial costs and support for legal disputes. The continuous expansion of our international network enables us to offer our customers access to expert lawyers and specialists, also abroad,' emphasised the divisional manager.

Comprehensive protection against cyber risks
For a couple of years now, Financial Lines has covered a second risk area which poses an increasing challenge for managers and companies: comprehensive protection against cyber risks. Mid-size businesses and large companies are having to defend themselves against a huge number of targeted attacks coming from the Internet. There are many different forms of attack and they are often critical. This is because criminals can gain access to business secrets, seriously disrupt production processes and in a worst-case scenario bring all business operations to a complete standstill.

As a result of these dangerous claims events with significant media impact, nowadays company leaders are fully aware that installation of security software in order to defend against viruses and trojans is not enough. There is a need for a protection concept made up of technical and organisational measures, and individual protection against cyber risks. Only this triad made up of prevention and security enables companies to operate safely in the digital world of today. 'First secure, then insure - this guiding principle from our history as an industrial insurer over more than 100 years is therefore more important than ever before,' emphasised the HDI Board Member.

The two pillars are trust and reliability
'This market presence over many years and customer relations often extending over generations are crucial for giving us an important competitive advantage particularly in the area of Financial Lines,' emphasised Würtz. When contracts are being drawn up, the decision-makers give insights into their own financial affairs and personal interests. If something serious occurs, they want to be able to rely on receiving the best advice and support. Ultimately, the key issue is about two things: their private investments and their reputation. The Head of Executive Protection in the Financial Lines Division at HDI continued by saying: 'Our business is therefore primarily based on two pillars: trust and reliability.'

You will find information on the benefits provided by the Financial Lines Division HDI Global SE, the industrial insurer from the Talanx Group, on these Internet pages:

HDI Directors & Officers (D&O) insurance: cover for the increasing liabilities risks in business every day more
On the safe side with HDI legal protection insurance more
Active protection against cyber attacks and their consequences more

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