Inpol Insurance Broker, JSC is a Czech corporation providing insurance services in the area of industrial and business risks.

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Liability insurance

Insurance for the members of the Board of Directors and members of the Supervisory Board in the event of their liability for damages

Members of the Board of Directors and members of the Supervisory Board are liable for any damages arising from the violation of legal responsibilities which occurs while they are performing their function. They may, for example, cause damage as a result of carelessness, errors, an incorrect announcement, non-performance and similar acts which are tied to their functions and thus may damage stockholders, creditors, customers, public administration agencies, etc.

According to the Commercial Code, the basic responsibilities of members of the Board of Directors include:

  • ensuring the business management of the company, including proper bookkeeping
  • presenting the company's annual financial statement at the general stockholder's meeting for approval
  • presenting reports at the general stockholder meetings regarding the business activities of the company and the state of its assets
  • making recommendations at the general stockholder meetings regarding the liquidation of the company and filing for bankruptcy
  • declaring the company's bankruptcy to the courts

As far as members of the Supervisory Board are concerned, their basic responsibilities according to the Commercial Code include:

  • controlling the effectiveness of the Board of Directors and the results of the company's business activities
  • reviewing the company's annual financial statements and making recommendations for the division of profits

According to the law, the members of the Board of Directors and the members of the Supervisory Board do not directly answer for the injuries to third parties that occur as a result of their activities. The company itself answers for injuries to third parties. Members of the Board of Directors and the members of the Supervisory Board answer only to the company for damages resulting from the performance of their activities. As far as the members of the Board of Directors are concerned, their liability for damages to the company is defined by the Commercial Code. Their liability for damages is defined as that which comes about as a result of the violation of their legal responsibilities and those who caused the damage are considered to be liable jointly and inseparably.

The liability of members of the Supervisory Board's for injury to the company is not specifically defined by the Commercial Code. An analogous legal revision of the liability of the members of the Board of Directors is used regarding them.

An injured party with a claim for the compensation of damages may turn only to the stock-holding company which is outwardly liable for the damages. Only after the company has compensated the damaged party may it turn to the member of the Board of Directors or the member of the Supervisory Board who caused the damage and request compensation of him/her in the amount that the company paid for him/her, based on his/her liability for damages.

Aside from the liability for damages that a member of the Board of Directors has towards the company, the Commercial Code defines a special circumstance for the liability of a member of the Board of Directors: a member of the Board of Directors is the legal guarantor when due to his/her violation of his responsibilities a third party is damaged and the stock-holding company that is outwardly liable for the damage is not capable of compensating these damages. In this situation, the members of the Board of Directors, who would otherwise be liable to the company, are liable for the obligations of the company jointly and inseparably. In this case, the damaged party who was not compensated for his damages by the company may turn to the member of the Board of Directors who is responsible for the injury and request compensation of him/her.



Important Certificates

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