Liquidators Professional Indemnity Insurance – regulations effective 1 June 2016
The Companies Act 2014 (the ‘Act’) introduced for the first time the qualifications required for a person to act as a ‘liquidator’. As part of the requirements laid down by the Act, section 634 stipulates that a liquidator must have professional indemnity insurance in place covering him or her in the event of a civil claim being made against the liquidator arising from the conduct of the liquidation.
The amount and terms of professional indemnity insurance required to be held by a liquidator of a company are contained in the Companies Act 2014 (Professional Indemnity Insurance) (Liquidators) Regulations 2016 (the ‘Regulations’) which were recently signed into law by the Irish Auditing and Accounting Supervisory Authority. The Regulations come into force on 1 June 2016.
The Regulations, amongst other matters, specify a minimum level of cover of €1,500,000 and related defence costs and that insurance run-off cover must be maintained for a period of 6 years.
Where a person already holds professional indemnity insurance, other than insurance required by section 634 of the Act, the Regulations do not require an additional policy to cover that person acting in the capacity of liquidator provided that the insured obtains an endorsement on the existing professional indemnity policy to the effect that the existing policy is sufficient to meet the Regulations.
For more information contact Michael Ohle or your usual Whitney Moore contact.