Trisura Guarantee Insurance Company is a Canadian owned and operated Property and Casualty insurance company specializing inƤniche insurance and surety products. WeƤare a proud supporter of the Insurance Brokers Association ofƤCanada. a step above Want something real? Real people. Real relationships. Real expertise. Find out more about our specialty insurance, warranty and surety solutions. Visit www.trisura.com Infrastructure - General Contracting Bridge - Aggregates INSURANCE INSIGHTS Another risk of personal liability for directors and senior management of construction companies arises from the nature of the work carried out by employees, which has a high potential for serious workplace injury. Severe workplace injuries or deaths in Canada have resulted in significant fines or jail time for individuals in charge who failed to do enough to prevent the incident. In the Metron Construction case, the Ontario Court of Appeal found the company criminally negligent after four workers died when a suspended swing stage collapsed from 14 floors above the ground, imposing a fine of $750,000. In addition, a site supervisor was sentenced to a three-and-a-half-year prison term and the owner and sole director of the company was charged with criminal negligence under Section 217.1 of the Criminal Code. Although the criminal charges were ultimately withdrawn against the owner, he was sentenced to personally pay a fine totaling $112,500. Finally, when a company experiences financial issues there is the potential for the directing minds of that organization to be held liable for unpaid employee wages or government remittances, such as taxes or HST. Under federal and provincial tax acts, where a corporation fails to remit taxes that it collected from others, directors will be liable alongside the corporation to pay any amounts owing, including interest and penalties. In the event the corporation is insolvent or cannot pay, the individual directors’ assets may be at risk. DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE Directors’ and officers’ (D&O) liability insurance is often used by executives to protect against the potential for individual liability. It provides coverage to directors and officers for claims that might otherwise hit their personal assets when corporate indemnification is not available. D&O policies can also provide coverage for the corpora- tion for amounts paid to its executives as a result of its indemnification obligations. D&O insurance could respond, at least to some extent, to all of the examples of individual and corporate liability discussed above. A D&O policy will typically include: coverage for defence costs, judgments, and settlement amounts where an individual or the company is faced with a claim. This can include coverage for defence costs to allow an individual to defend criminal charges, damages awarded in litigation brought by third parties and statutory liabilities imposed on directors where a company is insolvent, such as unpaid taxes or employee wages. Despite the best intentions of many companies and their executives to avoid third party liability and legal proceed- ings, even the most robust risk management program cannot provide fail-safe protection. For this reason, execu- tives in many industries utilize D&O insurance to transfer their risk exposure and protect both personal assets as well as the corporate balance sheet. Jennifer Drake is Vice-President and Legal Consultant with Aon Canada (jennifer.drake@aon.ca) UNDERGROUNDER Fall 2018 29