Directors and officers liability covers a wide range of litigation that could arise from customers, vendors, shareholders,employees and general public. This board insurance also covers litigation arising due to acts of another company, where the insured is serving as a nominee director.
D&O insurance can provide worldwide coverage. If the company has operations abroad, it can provide worldwide coverage for both territory and jurisdiction. This could cover claims arising from shareholders based abroad, or suppliers and clients being headquartered abroad.
Full Defence Cost
The Director liability insurance policy would pay for lawyers fees to defend a case in court. In addition, via add-on covers it can reimburse expenses to respond to a regulatory notice, investigation by authorities, and cost of hiring a PR consultant to minimize losses.
Employee Related Claims
Directors and officers insurance carry an extension called Employment Practices Liability Insurance (EPLI) and Entity EPLI. Employees may sue for acts such as sexual harassment, and biased termination.Entity EPLI extension extends this coverage to the company as well.
Directors’ Personal Liability covered
As per the Companies Act 2013, Directors & Key Officers of a company can be held personally liable for acts where they breach their authority
In specific cases, assets of the directors and officers can be confiscated, or they may be arrested
Insurance for directors helps defend against such claims including paying for costs to free-up encumbrance on Director’s personal assets and liberty through Bailbond expenses
Side A Cover available
D&O policy provides Side A and SIde B Cover. Side A cover is specifically to indemnify Directors and Officers when the company is unable to indemnify them directly. Typically, Side A cover has Nil Excess
Company may be unable to indemnify its Directors when it is either insolvent or prohIbited by law to do so
Under Side A cover, Directors & Officers can directly seek indemnification from the insurer without referring to the company
Tax Liability, Civil Fines and Penalties insured
In case of firm’s insolvency, if the Director is held personally liable for unpaid corporate taxes, the same can be covered under D&O liability insurance
D&O insurance can cover civil fines and penalties levied by a court of law or any statutory or appellate authority. It is however necessary that the local law should allow a liability insurance policy to cover this
These covers can be bought as customized add-ons in our D&O policy
Generally, claims arising from dishonest and fraudulent acts of directors and officers are excluded from the policy.D&O for board will not cover willful violation of regulation, illegal personal profits, remuneration and advantage. Claims reported under the prior insurance policy is also excluded under this liability policy.