According to German law, executive officers have unlimited personal liability to their companies for breaches of duty. Examining company damage claims against current or former executive and non-executive directors or supervisory board members for possible breaches of duty or defending directors/board members against such claims is normally an exceptionally complex matter. Frequently, the business transactions involved occurred many years ago and are extremely difficult to reconstruct, even if important documents, files, etc. are still accessible.
In this context, the existence of a D&O insurance policy is important for both sides: On the one hand, a substantial insured amount is oftentimes a prerequisite for the company to pursue damage claims that are associated with significant cost. On the other hand, the coverage provided by the D&O insurer is usually the only way for persons being sued by a company or by a third party (e.g. creditors) to finance the costly legal defense and not having to pay for it out of their own funds.
We have many years of experience with such cases due to our involvement with various national and international proceedings.