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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:D and O insurance for directors and officers: what is this and is it a viable option in South African law?
Author:Spisto, MichaelISNI
Periodical:The Comparative and International Law Journal of Southern Africa
Geographic term:South Africa
company law
Abstract:In terms of section 247 of South Africa's Companies Act of 1973, it is not open to the company to exempt a director from liability for breach of duty or trust or to indemnify him against claims in respect thereof. However, the question has been raised whether it is open to a company to take out an insurance policy giving the indemnity against liability for negligence. This paper argues that an indemnity insurance scheme for directors and officers is vital for the survival of most South African companies and the enterprise system in the country as a whole. It first describes the law on indemnification and the insurance policies currently available to directors and officers in the USA. Then it considers whether the adoption of a similar type of D and O insurance policy scheme in South Africa is necessary and appropriate. Ref.