The Lemon Fool

I posed a variant of this question (on TMF I think) some time ago but would be interested in current views: is it illegal for an insurer to indemnify a policyholder against a fine for a criminal act?
For example, could an employer take out insurance against a fine from an H&S Executive prosecution for running unsafe machinery which mangled an employee?
it is - or should be - against public policy- to offer or underwrite such insurance as it could be seen as assisting criminal behaviour, but is it illegal?

There is a legal doctrine which is established through precedent and common law : ex turpi causa oritur actio - from a dishonourable cause an action does not arise.

Whilst it does not seem illegal per se, the fact that the doctrine exists means nearly all if, not all, insurers would exclude this act from policy wording. This briefing deals particuarly with regulatory actions but I think the doctrine extends to all illegal acts https://www.burges-salmon.com/-/media/f ... ations.pdf

Maroochydore wrote:There is a legal doctrine which is established through precedent and common law : ex turpi causa oritur actio - from a dishonourable cause an action does not arise. Whilst it does not seem illegal per se, the fact that the doctrine exists means nearly all if, not all, insurers would exclude this act from policy wording. This briefing deals particuarly with regulatory actions but I think the doctrine extends to all illegal acts https://www.burges-salmon.com/-/media/f ... ations.pdf

Many thanks for that. The Burges-Salmon note is particularly relevant

stewamax wrote:

Maroochydore wrote:There is a legal doctrine which is established through precedent and common law : ex turpi causa oritur actio - from a dishonourable cause an action does not arise. Whilst it does not seem illegal per se, the fact that the doctrine exists means nearly all if, not all, insurers would exclude this act from policy wording. This briefing deals particuarly with regulatory actions but I think the doctrine extends to all illegal acts https://www.burges-salmon.com/-/media/f ... ations.pdf

Many thanks for that. The Burges-Salmon note is particularly relevant

There are shades of grey.

D&O insurance is going up very substantially right now, if you can get or keep a quote at all.

I know of folk that have had a 6x increase in their D&O in the last few months. They will shut the business as a result. Personally my D&O has gone up 1.5x this year.

Regards,
dspp

D&O insurance is going up very substantially right now, if you can get or keep a quote at all.
I know of folk that have had a 6x increase in their D&O in the last few months. They will shut the business as a result. Personally my D&O has gone up 1.5x this year.

I assume that the D&O indemnification you need covers Ds' and Os' legal costs in the event of a prosecution or statutory body penalty for 'inadvertent' criminal acts such as financial mis-statements but not for the penalties themselves e.g. FCA fines.
It is indeed a grey area!

In passing, I am a Trustee of a small charity whose Trustees D&O insurance is a serious drain on its small income to the extent that the charity will be in the red net year because of it. Time to shut it down I think.

stewamax wrote:

D&O insurance is going up very substantially right now, if you can get or keep a quote at all.
I know of folk that have had a 6x increase in their D&O in the last few months. They will shut the business as a result. Personally my D&O has gone up 1.5x this year.

I assume that the D&O indemnification you need covers Ds' and Os' legal costs in the event of a prosecution or statutory body penalty for 'inadvertent' criminal acts such as financial mis-statements but not for the penalties themselves e.g. FCA fines.
It is indeed a grey area!

In passing, I am a Trustee of a small charity whose Trustees D&O insurance is a serious drain on its small income to the extent that the charity will be in the red net year because of it. Time to shut it down I think.

D&O would presumably be aimed at cases where there was liability but no crime. The honest mistake. And indeed, the innocent until proven broke grey area.

stewamax wrote:

D&O insurance is going up very substantially right now, if you can get or keep a quote at all.
I know of folk that have had a 6x increase in their D&O in the last few months. They will shut the business as a result. Personally my D&O has gone up 1.5x this year.

I assume that the D&O indemnification you need covers Ds' and Os' legal costs in the event of a prosecution or statutory body penalty for 'inadvertent' criminal acts such as financial mis-statements but not for the penalties themselves e.g. FCA fines.
It is indeed a grey area!

In passing, I am a Trustee of a small charity whose Trustees D&O insurance is a serious drain on its small income to the extent that the charity will be in the red net year because of it. Time to shut it down I think.

Not just D&O - it's all insurances to pay for virus, weather and wild-fire claims.

And such as the 7-figure salary to be paid to the new Lloyd's of London CEO!!!!!!

I politely enquired about a rebate at renewal for premiums paid for events that have not taken place and I was told 'no way'.