+91 90333 30444
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Director & Officer Liability Insurance

What is Directors & Officers Insurance?

Directors and Officers (D&O) Insurance is a liability insurance policy that provides protection for directors, officers, and employees of a company against claims resulting from decisions or actions taken while performing their duties. It covers legal defense costs and other expenses incurred by the company in defending these individuals against lawsuits.

Directors & Officers can be sued or alleged for wrongful acts related to:

  • Breach of duty, breach of trust, misstatement or misleading statement, defamation, libel or slander, act of omission or negligence.
  • Employment process or inappropriate workplace conduct such as discrimination, retaliation, defamation, failure to promote, sexual harassment etc.
  • Claim solely because of their status.

Who needs Directors & Officers Insurance?

Any privately or publicly held company that has a corporate board of directors or an advisory committee should strongly consider obtaining a Directors & Officers (D&O) insurance policy. This policy is crucial for protecting the company’s directors, officers, and employees from potential claims arising due to their decisions or actions taken while performing their corporate duties.

D&O insurance offers financial protection against a wide range of risks, including lawsuits related to wrongful acts, negligence, breach of duty, or even employment-related allegations such as discrimination or harassment. By securing this policy, companies can ensure their leadership is shielded from personal financial liability, enabling them to focus on their roles with confidence and without fear of legal repercussions.

Why Should You Buy Directors & Officers Insurance?

Directors and officers are legally accountable to stakeholders, including shareholders, employees, creditors, customers, competitors, and regulatory bodies. Any breach of duty or wrongful act can lead to claims, resulting in expenses such as defense costs, damages, and compensation, impacting the company’s growth. This policy provides protection against such claims and associated losses.

Risk Management

Specialized expertise in identifying, minimizing, and mitigating potential risks to protect assets and ensure business continuity.

Risk Advisory

A dedicated value-added services team focused on risk advisory and safety installations.

Efficient Claims

Quick claims settlement process with minimal documentation requirements.

Financial Stability

Robust financial strength ensuring exceptional claims-paying capability.

What’s Covered in Director & Officer Insurance?

  • Covers Directors and officers for claims where the company refuses to or is financially unable to pay for loss and the Directors and officers have to protect themselves, against demands, legal suits, allegations

  • related to employment process or inappropriate workplace conduct such as sexual harassment, gender or caste discrimination, retaliation, defamation, failure to promote, etc. Covers company under Employment practice liability (EPL) from wrongful acts arising out of allegations and legal suits

  • Impact damage of any kind, i.e. damage caused by impact of, Covers costs incurred by the insured company in defending such individual against losses.falling trees, aircraft, wall etc.

  • Claims arising out of Bodily injury and property damage

  • Policy will not cover Salaries, wages, personal expenses, benefits or overhead expenses of an Insured Person.

  • Claim arising out of Public/private offering of securities.

  • Claims arising out of Crime, Fraud and Personal Conduct

  • Claim made by Major shareholders against other insured persons

Frequently Asked Questions

Directors and officers are legally responsible and bound by duty towards various stakeholders like Shareholders, employees, creditors, customers, competitors and government or regulatory bodies. Any breach or non-performance in the duties can result in claims against directors, officers and employees by reason of wrongful act. This can affect company’s growth and performance. This policy will protect against such losses and claims.

Yes, Member of Board of Directors can be sued. Any stakeholders like Shareholders, employees, creditors, customers, competitors and government or regulatory bodies can sue a particular member of the board.

Yes, as per the companies’ act, the Director or officer can be alleged and held personally liable for their actions.

Yes, the liability of director is unlimited resulting loss of personal assets at time of insolvency or any claim. This policy will protect personal assets of director.

Following parties are insured under D&O policy:

  • Director, Officer, or employee of a company.
  • An outside entity director.
  • A consultant as member appointed by company’s board.
  • Trainee
  • Employed Lawyer
  • Spouse of insured person.
  • Administrator, heirs, legal representatives.

A director and officer is person who holds a managerial or supervisory position in the company. The concerned person can be member of board of directors or part of organization’s management.

Any privately or publicly held company with corporate board or advisory committee should take D&O policy to protect their Directors, officers and employees.

The D&O policy covers personal liability of directors, officers and employees arising due to wrongful acts while performing duty. It also covers defence costs and other expenses incidental to a loss.

The policy will only cover civil fines and penalties levied on an insured due to violation of laws or regulations and when such fines and penalties are insurable by law.

  • Entity is covered under Employment practice liability (EPL) coverage. Which protects company from claims arising out wrongful acts of employment process or inappropriate workplace conduct such as discrimination, retaliation, defamation, failure to promote, sexual harassment etc.
  • Entity Security cover corporate entity when claims are made against the entity in conjunction with securities it has issued.
  • Addon covers may be availed by paying additional premium.

  • Yes, Entity is covered under Employment practice liability (EPL) coverage. Which protects company from claims arising out wrongful acts of employment process or inappropriate workplace conduct such as discrimination, retaliation, defamation, failure to promote, sexual harassment etc.
  • Entity Security cover corporate entity when claims are made against the entity in conjunction with securities it has issued.

Yes, It covers legal defense costs. It covers defense cost for breach of occupational health and safety laws, including workplace death.

The policy will only cover civil fines and penalties levied on an insured due to violation of laws or regulations and when such fines and penalties are insurable by law.

  • Insured’s name and address
  • Audit report of company
  • Share holding pattern

Following parties are insured under D&O policy:

  • Director, Officer, or employee of a company.
  • An outside entity director.
  • A consultant as member appointed by company’s board.
  • Trainee
  • Employed Lawyer
  • Spouse of insured person.
  • Administrator, heirs, legal representatives.

Yes, Small businesses and companies are most vulnerable to financial damage from litigation fees than large company with more money and resources. However, proprietorship firms may not buy as the ownership is individual.

The D&O policy is only of one type. The one which is purchased by corporate entities to protect their directors, officers and employees. The policy is quite customizable and one should take relevant coverage in the policy.

Claim Information : On mail

LOR Request : List of requirements to be share by the sales team.

Submission of internal reports : To be submitted by insured

Investigation Reports : Final claim amount to be shared with final investigation report

Seeking Documents : DV to be signed by insured

Remittance Payment of claim amount

  • Insured’s name and address.
  • Audit report of company.
  • Share holding pattern.

At Finoxo Solutions, we specialize in providing tailored insurance solutions that cater to both commercial and individual needs. With a commitment to excellence and innovation, we ensure our clients receive comprehensive coverage and unmatched service for their peace of mind.

Address

B-407, Decora 9 Square, Nr. Nana Mava Chowk,RAJKOT

+91 90333 30444

info@finoxo.in

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