A cap on liability implemented in Europe will make no difference at all and will not prevent large losses, CEA criticizes. It will not improve the insurability of large auditing firms and hence the availability of insurance coverage.
A cap on liability implemented in Europe will make no difference at all and will not prevent large losses, the CEA criticizes the Commissions recommendation. It will not improve the insurability of large auditing firms and hence the availability of insurance coverage, it added.
This is especially true against the background of the current financial turmoil where most “subprime”-type claims have a US element or where the allegations or acts are deemed to be intentional, CEA states.
“The EC has clearly decided to protect the community of auditors in Europe”, CEA notes and predicts that shareholders and institutional investors will seek other ways to recover a large loss. “This could shift the problem to directors and officers (D&O) or errors and omissions (E&O) insurance; putting up costs, reducing availability or both”, CEA states.
Press release
© CEA - Comité Européen des Assurances
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