New Problems in Indemnifying and Insuring Directors: Protection Against Liability Under the Federal Securities Laws

Abstract

In recent years corporate directors and officers, and their lawyers, have become aware that the Damocles' sword of personal liability is as much a part of the furniture of the executive suite as the Bigelow on the floor. Some of the awareness has been stimulated by the imaginative advertising of insurance brokers pushing directors' and officers' liability insurance; some has come from painful personal experience; but the main source has been the proliferation of lawsuits seeking (frequently with success) to impose such liability. Much of this litigation has been based on such traditional grounds as breach of duty to the corporation, but fertile legal imaginations have conceived novel and alarming theories of liability.