Section 155 Appointment Cover for Appointees
Genoa Underwriting Managers, on behalf of Lombard Insurance Company Limited, offers a bespoke Professional Indemnity Insurance Policy to cover negligence by a Section 155 Appointee.
A Section 155 Appointment is a compromise reached between a debtor company and its creditors. Also known as an informal mechanism of restructuring a company’s obligations to its creditors, established under Section 155 of the Companies Act, No 71 of 2008 (“the Act”).
As the company owes creditors money and faces financial difficulties, it is called and referred to as the “debtor company”.
Once a compromise is proposed by the debtor company or its liquidator (if liquidation preceded the proposal), creditors must vote on the proposal, and the court must thereafter make the compromise an order of court.
A Receiver is appointed by a Court (“the Appointee”) to administer the claims of creditors of the debtor Company set out in the proposal/ scheme of compromise.
Business Restructuring Insurance Support For Appointed Professionals
Professionals appointed under Section 155 may face claims arising from alleged errors, omissions, or negligence in performing their duties. Genoa’s business restructuring insurance provides professional indemnity cover for Section 155 Appointees, helping protect them against the legal and financial consequences of covered claims.
Why Does Section 155 Appointment Cover Matter For Appointees
A Section 155 appointment carries professional duties, legal responsibility, and personal risk. Section 155 appointment cover helps protect appointees from claims, disputes, and legal costs arising from their role.
Appointees often make decisions or act on behalf of others, which can expose them to financial loss or liability without proper protection. Genoa’s cover supports appointees by reducing these risks, allowing them to carry out their responsibilities with confidence.
Why Choose Genoa?
As Genoa's footprint in the liability space continues to grow from strength to strength, we thought we would share with you why more and more brokers are choosing to work with us as their partner of choice:
Our Underwriters are committed to providing our clients with superior turnaround times when issuing quotations and schedules of cover
Our underwriters are experts in their respective fields and are able to offer our clients technical advice which helps empower them to secure an account
We have strong working relationships with the top re-insurers in the country, including Munich Re and Swiss Re who support all of our Professional Indemnity products
Through strategic reinsurance partnerships we are able to offer competitive market premiums
Our policies include a number of meaningful extensions that offer true value to our thousands of Insured clients
Our Insured Practitioners are represented by the top law firms in the country, including firms like Clyde & Co, Garlicke & Bousfield, Mac Robert Attorneys, Norton Rose Fulbright, and Webber Wentzel
OUR COVER CAN INCLUDE:
Professional Indemnity
Fidelity Guarantee Cover
1) theft by an Appointee or nominated Subcontractor; or
2) fraud or dishonesty by an Appointee or nominated Subcontractor.
Cover is specifically on a Named Person Basis.
Section 155 Appointment FAQs
What Is The Difference Between A Section 155 Compromise And A Business Rescue?
A Section 155 Compromise is a process for reaching an arrangement with creditors and restructuring certain obligations through an agreed-upon proposal. Business rescue is a separate formal process that involves a business rescue practitioner, a broader rescue plan, and ongoing oversight aimed at rehabilitating the company.
Can A Company Use Section 155 If It Is Not Financially Distressed?
Yes, Section 155 can apply to a company even if it is not financially distressed, provided it is not already in business rescue proceedings. It can be used as part of a business restructuring strategy where a company wishes to reach an agreement with creditors without entering a formal rescue process.
When Does A Section 155 Compromise Become Binding?
A Section 155 compromise becomes binding once the required creditor approval and court-sanctioning steps have been completed and the court order has been filed as required. After these requirements have been met, the compromise with creditors can be implemented in accordance with the approved terms.
What Risks Can An Appointee Face During A Section 155 Process?
An Appointee may face claims linked to alleged negligence, errors, omissions, fraud, dishonesty, or loss of property during a Section 155 Appointment, depending on their duties and the cover selected. Professional indemnity insurance can help protect against certain liability risks that may arise while carrying out responsibilities under a court-appointed role.