Business Rescue Insurance
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.
Benefits of this indemnity cover
- Our bespoke BR PI cover extends to include members of your team, if selected on a named basis and engaged to work on the Business Rescue.
- Our cover is available on an individual matter basis which can be purchased on a quarterly, half yearly or annual basis, depending on your needs.
- Where more than one BRP is appointed as practitioner in relation to the BR Entity, SRM will cover both appointees, provided they are both licensed practitioners by CIPC.
- An automatic 12 months extended notification period is offered on our business rescue policies. This notification period allows you to notify us of a claim after the business rescue has been terminated for reasons set out in the policy wording.
- Most PI policies are underwritten on a “claims made” basis, meaning a claim can only be made if the policy is in force. We have identified that this is not practical in a business rescue scenario, as a claim may only arise after the business rescue has been finalised, and the policy cancelled therefore in addition to the free 12 month ENP, we offer further extended notification periods such as 24 and 36 months which can be purchased at a small additional charge.
Fidelity Guarantee Cover
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.