Director's & Officers Liability Policy:

The policy is designed to protect against legal claims for wrongful acts of Directors or officers in the performance of their corporate duties. Wrongful acts include omissions, errors, misstatements, misleading statements, neglect or breach of duty.

Beneficiaries are the Directors, Officers or the Company (the body corporate) itself.

What could expose D&O’s?

• Defective organization and supervision
• Improper disclosure & financial reporting
• Earnings restatements
• Unsuccessful mergers or acquisitions
• Employment related matters

Who files suites?

• Shareholders
• Employees
• Government
• Competitor
• Creditors
• Customers and Clients
• Company

What is covered?

• Coverage A - D&O Liability Coverage
• Coverage B - Company Reimbursement
• Coverage C - Securities Entity Coverage
• Coverage D - Outside Directorship Liability

What is not covered?

• Prior Claims
• Insured vs. Insured Claims
• Bodily Injury and Property Damage Claims
• Pollution Claims
• Nuclear Exposure / War / Terrorism Related
• Fraudulent act or omission or any wilful misconduct
• Claims arising out of Personal Profit to which Insured is not legally entitled
• Professional Errors & Omissions
• Offering of Securities and/or Prospectus
• Major Shareholder
• Asbestos & Silica
• Breach of copyright or infringement of copyright or patent
• In capacity as trustee or fiduciary under law (statutory or non-statutory including common) or administrator of any pension, profit sharing or Employee benefits programme.
• Claims arising out of failure or omission to effect or maintain insurance

Who should buy this?

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.