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Whistleblower Protection Act

... is now in force.

Hey #VCs, do you already have a system in place for safe #whistleblowing? And what about D&O insurance cover? 

One month ago today, the German Whistleblower Protection Act came into force. Since July 2, 2023, not only companies with more than 50 employees, but also fund managers or ManCos (capital management companies pursuant to Section 17 (1) of the German Investment Code) are obliged to set up and operate a whistleblower system, regardless (!) of the number of employees. From December 2, 2023, fines will be levied if this has not been done. 

The main aim of the legislator is to offer whistleblowers who report #crimes or serious violations in the corporate sector a protected framework for such communication. The identity of the whistleblower is to be kept technically and legally confidential in order to protect them from sanctions and liability. The legal regulation goes beyond the existing organizational measures that KVGs already have to comply with under the German Money Laundering Act or Section 28 KAGB.

A holistic approach to risk management

We can put you in touch with a LegalTech unit of a renowned law firm that offers a software-based legal service in outsourcing for VCs specifically for this purpose and, in addition to a reporting channel, also maps the internal reporting office from the HinSChG together with the VC. Please do not hesitate to contact us.

Are fines under the Whistleblower Protection Act covered by the D&O?

In principle, the special reporting office officer should also be insured in your D&O wording in accordance with § 12 HinSchG, for example in the extended sense as an employee - or also in the case of outsourcing - in their capacity as a compliance officer or in their capacity as a special officer or person responsible for ensuring compliance as provided for by law.


When it comes to fines in D&O claims handling, insurers sometimes differ greatly in the extent to which fines are actually covered. There are a few insurers who pay fines for acts of negligence, but there are more and more insurers who refuse to cover and even defend against official proceedings by hiring a lawyer (keyword "defense coverage"). This blanket refusal should be critically scrutinized!

How does your D&O cover specifically relate to the regulations on fines under #HinSchG and is the reporting office officer also an insured person in your wording? - Let us check your D&O contract for you individually and without obligation and ensure security vis-à-vis the reporting office officer. Please contact our team at Risk Partners GmbH:

Florian Eckstein, Managing Director
Franziska Merz, Senior Risk Advisor Financial Lines
Miriam Born, Head of Legal - External Counsel

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