Directors & Officers Liability Insurance Policy

The directors and officers of any corporate shoulder many responsibilities relating to the conduct of business. Any slip can result in a suit and fastening of personal financial liability. Even in a case where the suit is groundless, the expenses of defending it can be enormous. The risk is multiplied if the suit has arisen in a foreign country. Directors and Officers Liability Insurance Policy protects the management against the financial liabilities arising from the activities connected with the business operations.

The Policy covers

The financial liabilities relating to –

• Lapses in supervision of company operations
• Furnishing wrong statements of accounts
• Decisions based on erroneous judgements
• Mismanagement of funds
• Incorrect and misleading statements / information in company prospectuses, annual reports etc.
• Improper Allotment of shares
• Misrepresentation during takeovers, amalgamations, changes in shareholding, liquidation etc.

And such other decisions taken during discharge of official responsibilities

• Policy on ‘claims made’ basis
• Liabilities arising out of directorship in subsidiary companies covered
• Outside directorship can also be covered
• Coverage possible for liabilities emanating from anywhere in the world.
• Coverage for financial award as well as legal costs

The liabilities can emanate from numerous sources -

• Shareholders
• Customers and clients
• Suppliers
• Competitors
• Employees
• Members of public
• Government – income tax, excise, etc.
• Regulatory Bodies

What is not covered – the liability is not covered in the following cases

• · Prior and pending claims at the commencement of policy
• Dishonest and fraudulent acts
• Pollution Liability
• Bodily injury
• Property Damage
• Insured Vs Insured – i.e. suits from company, fellow directors etc.
• Illegal personal profit and remuneration
• Insider trading