A Deed of Indemnity is a critical form of protection for all directors and officers in companies of all sizes
Most directors and company officers will experience some form of claim, litigation or Commission during their professional career. This especially true considering the increased risks, more legal and regulatory compliance obligations to stay on top of, significant funding boosts to regulators, increased use of Royal Commissions, regulator investigations and ASIC’s recent adoption of a ‘Why not litigate?’ approach.
Why do you need a Deed of Indemnity?
A well-drafted, comprehensive Deed of Indemnity is an important contractual protection which requires a company to indemnify you, as an individual director, against potential claims, liabilities, penalties, legal costs and expenses, including when you are no longer a director of the company.
Often a company’s Constitution will include some form of indemnity, however it rarely goes far enough to provide directors with sufficient protections. Plus, the terms of the Constitution: