Draft law on top managers’ liability insurance has been prepared

The Ministry of Economic Development has prepared a draft law which should expand the possibilities for insuring the civil liability of top managers for economic damage to their companies and third parties as a result of decisions made within the scope of their official duties.

Currently, the Russian Civil Code prohibits entering into contracts that limit or release top managers from liability for losses caused by their bad-faith or erroneous actions. Thus, only the liability risk of insured person may be insured, but such contracts are expensive for top managers, so they are unpopular. The bill lays down the company’s right to enter into the property insurance contract.