The 'safe harbour' provisions, introduced in Australia, offer directors protection from personal liability for insolvent trading if they take proactive steps likely to result in a better outcome than immediate administration or liquidation. By incorporating this extension, Liberty aims to provide directors with the financial support necessary to seek expert advice during periods of financial uncertainty.
Jack Cox, Australian Underwriting Manager for Professional and Financial Risks at Liberty, emphasized the significance of this development, stating, "We are proud to be the first and only insurer in the market offering safe harbour advisory cover to our policyholders." This initiative reflects Liberty's commitment to addressing the evolving needs of businesses and their leadership teams.
To deliver this service, Liberty has partnered with leading advisory and restructuring firms, ensuring that insured companies have access to top-tier expertise when navigating potential insolvency scenarios. This collaboration underscores the importance of timely and informed decision-making in mitigating risks associated with financial distress.
For Australian businesses, particularly SMEs and sole traders, this extension offers a valuable safety net. It not only provides financial assistance for obtaining critical advice but also reinforces the importance of proactive risk management strategies. Directors can now approach challenging financial situations with greater confidence, knowing that their D&O policy includes provisions for seeking expert guidance under the 'safe harbour' regime.
In summary, Liberty Specialty Markets' introduction of the insolvency extension to its D&O liability policies represents a significant advancement in the Australian insurance landscape. By aligning their offerings with legislative frameworks and the practical needs of businesses, Liberty is setting a precedent for comprehensive and responsive insurance solutions that support directors in fulfilling their duties during times of financial uncertainty.
