An upcoming Ontario case could have a meaningful outcome for hospitality owners, directors and employees across Canada. This provides another example as to why companies today should consider a Directors & Officers Policy.

Below is a link to three articles relating to an automobile accident a couple of years ago, where 3 young adults were killed after leaving a golf course.

Aside from the civil action you would expect in a Motor Vehicle Accident, there have been Liquor License Act charges laid against (3) employees who were serving that day, and (13) directors of the golf course where the group had been drinking - none of whom were on the premises at the time.

The golf course is facing a $250,000 fine on each charge and potential immediate suspension of their liquor license. The directors and employees each personally face up to $100,000 in fines and/or up to 12 months in jail.

From an insurance perspective, with respect to defending against the Liquor License Act charges, the important thing to understand is there is no coverage provided to any of the 16 individuals under the company's General Liability policy. The liability policy only will respond to defend the Club (and the individuals) in the civil matter.

The 16 individuals facing these charges have to pay for their own defence. The policy that will pay for this potentially costly defence is a Directors & Officers policy (the definition in most of these policies will extend to also cover employees). The golf course in this case does carry a Directors & Officers policy.

No insurance policy will pay for any fines/penalties assessed, but often the defence costs to defend the charges will exceed any fines.

If you have any questions related to this article, this incident, or Directors & Officers Insurance, I welcome your call.

- Luke Horcica

To view the article click here: Too Drunk to Drink Anymore... Says Who?

Source: BC Golf News Top Stories and Events