A Business Rescue Practitioner (BRP) is a member in good standing of a legal, accounting or business management profession who is accredited by the Companies and Intellectual Property Commission (CIPC) and has been licensed as such by CIPC. The BRP may be appointed by court order or CIPC to develop a plan to rescue the company in BR.
The BRP has full management control of the BR Entity in substitution for its Board and pre-existing management. The BRP also has the responsibilities, duties and liabilities of a director of the Company. As such the BRP may be exposed to various risks throughout the business rescue.
During the Business Rescue Process of the Company, the Practitioner is not liable for any act or omission in good faith in the course of the exercise of the powers and performance of the functions of Practitioner, but may be held liable for any act or omission amounting to gross negligence in the exercise of the powers and performance of the functions of Practitioner.
At SRM, we understand the complexities and unpredictability of a business rescue and our Professional Indemnity Insurance is designed with all this in mind, to indemnify you against loss arising as a result of gross negligence by you in terms of Section 140(3)(c)(ii) of the Companies Act.
Should the BRP select Fidelity Guarantee cover on his PI policy, the Entity in BR would enjoy cover against direct financial loss sustained by it as a result of fraud or dishonesty of the BRP or members of his team if the loss occurred during the currency of the selected cover. FG cover may be selected on a blanket basis (all staff members), or a named persons basis (only certain staff members) or a position basis (only certain positions regardless of the identity of the staff member).
At SRM, we have taken the time to understand and appreciate the risks the BRP and the BR Entity face and this has allowed us to be pioneers in the business rescue insurance industry and to develop a product exclusive to those needs.