Sri Lanka has seen a marked increase in the number of claims filed against corporate executives exposing them to potential personal liabilities for violation of laws and regulations, says a leading insurance figure in the country.
Ravi Liyange, the General Manager Sales and Marketing at Janashakthi Insurance PLC says this trend is more evident, specially with the collapse of some of the major financial institutions in recent times.
He said some well known business leaders and top corporate executives have lost virtually everything they had earned during their life time.
Liyanage said this situation has emanated as a result of regulators, depositors, shareholders/investors, employees and consumer groups more aggressively working towards influencing corporate decisions to protect their rights.
He added Business leaders are thus confronted with various risks such as hazards associated with mergers, acquisitions, public offerings and day-to-day operations.
Ravi Liyanage also points out that the new Companies Act in place also has enforced greater accountability on Company Directors and Officers for their decisions.
He says according to Janashakthi’s experience as a marketer of Directors’ and Officers’ Liability Insurance policy, never before Directors of companies has faced a greater likelihood of being sued because of their decisions as of now.
Liyanage says in order to face such an eventuality it is important for company directors and other officials to obtain a Directors and Officers’ Liability Insurance policy.
He notes that such a policy will financially safeguard Directors and other company officials against the legal liabilities that may arise against them under the Companies Act No. 7 of 2007
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