Corporate Officer Liability

A recent Wisconsin Supreme Court decision has significant implications regarding liability of corporate officers for negligence, and direct actions against insurance company.

Casper v. American International South Ins. Co, 2011 WI 81 involves an automobile accident caused by an employee of trucking companies who was under the influence of prescription drugs at the time of the accident.  The CEO of one of the companies was named as a defendant  He was not involved in the hiring or supervision of the driver, but had approved the trucking route used by the driver, which allegedly violated federal trucking safety regulations.  The argument was made he could not be held personally liable for negligence committed with the scope of his employment.

The unanimous court refused to accept this argument, in effect acknowledging that there could be circumstances when a corporate officer can be held personally liable for such negligence.  The court noted that the even the business judgment rule, which provides protection for corporate officers acting in the course of their duties, protects officers and directors only for negligent acts harming shareholders, not third parties.Continue Reading New Decision on Corporate Officer Liability and Direct Action Against Insurer