Life and General Insurance

 

 The D&O policy provides cover for the personal liability of Directors and Officers arising due to wrongful acts in their managerial capacity. Defense costs are also covered and are payable in advance of final judgment. This policy provides protection for claims brought against directors, officers and employees for actual or alleged breach of duty, neglect, misstatements or errors in their managerial capacity.

 

Scope

Provides cover

1. Against any loss that the Organization may incur, on account of mistaken actions taken in their individual capacity as Directors & Officers in pursuance of their duties under Memorandum and Articles of Association.

2. Against loss arising from claims made against them by reason of any wrongful Act in their Official capacity.

3. Legal costs & expenses incurred with the written consent of the insurers arising out of prosecution (criminal or otherwise) of any Director / officer and attendance at any investigation, examination, inquiry or other proceedings by the authority empowered to do so.

4. Expenses incurred by any shareholder of the Company in pursuance of a claim against any Director / Officer, which the Company is legally obliged to pay, pursuant to an order of a Court.

5. Provide indemnity to the estate of, legal heirs or legal representatives of the Director / officer in the event of the Director / officer becoming insolvent.

 

Why is a Directors and Officers liability insurance policy required?

Some of the specific exposures that make D&O insurance necessary for the Directors and Officers are:

• Vulnerability to shareholder/stakeholder claims

• Sexual harassment, discrimination allegations and other employment practice violations

• Regulatory investigations

• Accounting irregularities

• Exposures relating to mergers and acquisitions

• Corporate Governance requirements

• Compliance with various legal statutes

 

Who can bring an action against Directors and Officers?

• Employees

• Suppliers

• Competitors

• Regulators

• Customers

• Shareholders

• Other stakeholders

 

How  does the cover applies

The cover applies to former, present and future members of the board of directors, the management and any employee performing a managerial or supervisory role.

• Why should Indian companies buy Directors and Officers liability insurance?

• Indian companies need to purchase D&O insurance to protect their Directors and Officers from exposures arising out of compliance with various statutes. Directors have highly demanding legal obligations to uphold. They also have a fiduciary duty to exercise skill, care and diligence. Further, even independent and nominee directors are held to be equally accountable to stakeholders.

Also, as Indian companies foray into the global marketplace to sell their products and services or to mobilize capital, they need to purchase D&O insurance to secure protection from overseas exposures.

 

Premium
Premium depends on profile of the client, the Sum Insured selected, present and past functioning of the company, information in the balance sheet and annual report, degree of exposure etc.