Deed of Indemnity for Directors
- Your first template is free
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Company directors are subjected to a wide range of obligations. If something goes wrong, as a director you could be personally liable for any resulting costs. A good way to mitigate this risk is by using a deed of indemnity. Keen to know more? Then, keep reading.
A deed of indemnity is an agreement between a company and one of its directors. Its purpose as a contract offers the director protections under the Australian Corporations Act 2001. The deed ensures that the director will not be personally liable for any costs incurred due to any breach of the Act. Or, at least limit the liability a director could face from the discharge of their duties while managing the company.
Download this template at Lawpath
A Deed of Indemnity should be used by executives of a company to protect themselves against liabilities that may arise. The Act is lengthy and complex. Under the Act, directors have many legal obligations. While not meeting all of those obligations isn't criminal, it could be in breach of regulations under the Act. Often this can occur without the director's or the company's knowledge. These kinds of liabilities can be huge financial burdens. If in that position, you should use a deed of indemnity to protect yourself against that happening.
Deeds of indemnity and Directors' and Officers' (D&O) Insurance are different kinds of legal contracts. D&O insurance is usually an insurance policy taken out by companies in order to protect its directors and officers against potential breaches of the Act. Deeds of indemnity insurance has the same function. However, this kind of contract is usually taken out by a director in agreement with the company.
What this means is that companies take out D&O insurance to protect its executive staff. With deeds of indemnity, the difference is that directors themselves seek to insure against breaches of the Act when acting as director for the company.
A deed of indemnity should all include the following essential components:
The deed of indemnity should include a list of definitions. This might include how the document refers to the Act in the document and other key terms. Scope of the contract could also include indemnity after their time as director has finished.
The indemnity clause should state the extent to which the company will be liable. As director it would be best to provide clauses to the effect that the company is liable to the maximum extent permitted by law. It could also include indemnity against legal costs arising from a breach of the Act.
Any deed of indemnity must include a clause setting out the director's access to documents. Should litigation against the director occur, the best way for them to defend a legal challenge will be with company documents. Even if litigation is by the company against the director this clause will ensure the right of the director to necessary documents in their legal defence.
While a deed of indemnity is a kind of insurance, for legal purposes it is not an insurance contract. There can be circumstances where an insurance contract can make part of the deed. However, this will almost always include a third party insurer. Any D&O insurance policy or any other third party insurance policy relevant to the duties of director should be included on the deed of indemnity.
The execution clause should be at the end of the Deed of Indemnity document. Executing the contract means both parties sign the deed. This gives effect to the terms and conditions listed on the document making it a legally binding contract.
A deed of indemnity can only be as wide as the Corporations Act allows. What this means is that a deed of indemnity cannot protect against offences which are applicable to the criminal code. By including terms that are outside the protections offered in the Corporations Act, there is the risk that any deed of indemnity could be considered void.
A contract lawyer is typically considered to be necessary for finalising a deed of indemnity. Templates for deeds of indemnity are available and it is possible to draft a document of this kind by yourself, or with the help of other staff in your company. However, it is strongly recommended that a lawyer specialising in contracts is consulted to finalise the contract. The reason for this is that should the deed be presented in a civil litigation case the deed will have a stronger legal grounding.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
When drafting deeds of indemnity it must be remembered that it is best to have a contracts lawyer finalise the document. With that in mind, starting with a template will be the best way to begin drafting the document. This will allow you to put in all the key information relating to the job description and the details of the director and company. When you have drafted the essential components of the deed — as mentioned above — the document is ready for review with a contract lawyer.
Amazon Prime Day 2021 officially starts on June 21 - or does it? Here's a stack of early-bird deals you can get right now.
Many Internet providers in Australia are Aussie-owned but you might be surprised at which ones don’t make the list.
The 10 biggest movers on the ASX for Wednesday 16 June 2021.
The Finder app is a powerful savings tool that tracks your money and finds you new ways to save. Download today.
From makeup to skincare to haircare, these are the hot beauty offers we're expecting to see this Prime Day.
Undefeated heavyweight Justis Huni and former NRL star Paul Gallen will square off in what's being called Termination Day.
Score up to 75% off cookwares and kitchen appliances when you add these 'hidden' discount codes during the eBay EFOY sale.
Shares in the beverage maker had lifted nearly 15% since February.
From when to shop to how to split the cost of your purchase, we’ve got you covered this Prime Day.
Everything we know about the Charger Metals IPO, plus information on how to buy in.
finder.com.au is one of Australia's leading comparison websites. We compare from a wide set of banks, insurers and product issuers. We value our editorial independence and follow editorial guidelines.
finder.com.au has access to track details from the product issuers listed on our sites. Although we provide information on the products offered by a wide range of issuers, we don't cover every available product or service.
Please note that the information published on our site should not be construed as personal advice and does not consider your personal needs and circumstances. While our site will provide you with factual information and general advice to help you make better decisions, it isn't a substitute for professional advice. You should consider whether the products or services featured on our site are appropriate for your needs. If you're unsure about anything, seek professional advice before you apply for any product or commit to any plan.
Products marked as 'Promoted' or 'Advertisement' are prominently displayed either as a result of a commercial advertising arrangement or to highlight a particular product, provider or feature. Finder may receive remuneration from the Provider if you click on the related link, purchase or enquire about the product. Finder's decision to show a 'promoted' product is neither a recommendation that the product is appropriate for you nor an indication that the product is the best in its category. We encourage you to use the tools and information we provide to compare your options.
Where our site links to particular products or displays 'Go to site' buttons, we may receive a commission, referral fee or payment when you click on those buttons or apply for a product. You can learn more about how we make money here.
When products are grouped in a table or list, the order in which they are initially sorted may be influenced by a range of factors including price, fees and discounts; commercial partnerships; product features; and brand popularity. We provide tools so you can sort and filter these lists to highlight features that matter to you.
We try to take an open and transparent approach and provide a broad-based comparison service. However, you should be aware that while we are an independently owned service, our comparison service does not include all providers or all products available in the market.
Some product issuers may provide products or offer services through multiple brands, associated companies or different labelling arrangements. This can make it difficult for consumers to compare alternatives or identify the companies behind the products. However, we aim to provide information to enable consumers to understand these issues.
Providing or obtaining an estimated insurance quote through us does not guarantee you can get the insurance. Acceptance by insurance companies is based on things like occupation, health and lifestyle. By providing you with the ability to apply for a credit card or loan, we are not guaranteeing that your application will be approved. Your application for credit products is subject to the Provider's terms and conditions as well as their application and lending criteria.