Directors and Officers Liability Insurance for Your Business

A comprehensive solution for protection of your founders, officers and board members from personal liabilities

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What is Directors and Officers (D&O) liability insurance

D&O insurance is a comprehensive insurance policy that safeguards any director, key management personnel, or decision maker from personal liability that may arise due to wrongful decisions and actions taken while on the job

Why do you need directors and officers liability insurance

Risk mitigation

Shields your company from liabilities that may arise due to unforeseen wrongful acts. Your company and board is protected for liabilities that can arise from unforeseen wrongful acts.

Financial coverage

Secures your business and its key decision makers against risks and financial repercussions arising out of managing a company.

Regulatory investigation

Helps with compensation towards litigation, settling lawsuits, official inquiry, and other claims.

Adequate evaluation

Makes your company a better and more protected business to invest in.

Legal compliance

Complies with the Companies Act, 2013 and its primary recommendation.

Builds reputation

Facilitates better governance practices by providing cover in the case of genuine default.

What does D&O liability insurance cover

Personal liability

Protects the personal liability of Directors & Officers and protects executives from claims when corporate indemnification is not available from their company.

Judgments & settlements

Covers settlement payouts when it comes to larger liability claims.

Third party claims

Covers costs incurred to protect the directors & officers against a third party in accordance with its corporate indemnification obligations.

Investigation costs

Safeguards against costs incurred to conduct an official inquiry or investigation, or represent the insured at such inquiries.

Defence costs

Covers costs of legal representation and lawful compliance consultancy.

Shareholder expenses

Shields corporate entity against the claim filed by the shareholders in connection with buying and selling or ownership of securities.

How is D&O liability insurance cover better with Plum

Expert advisors

We understand the rapidly changing business environment and can advise you with respect to people & business related insurance requirements.

Compliant with regulations

Our advisors offer the top relevant options conducive to your business setting ensuring compliance with The Companies Act, 2013 and its various amendments.

Cost competitiveness

We provide you with the best premium options in the market.

Complete transparency

Our team will walk you through each inclusion and exclusion in detail and conduct a highly transparent process for building the right coverages and plans

Ease of claims settlement

We assist and aid the claim process by liaising with the insurers/legal counsel and team of experts.

Guide to good practice

We help you set up a guide on best practices followed in the industry to protect against such incidents.

Frequently asked questions

Who is included under D&O liability insurance?

D&O Liability Insurance covers:

  1. Directors and officers employed by the organization
  2. Directors and officers of subsidiaries
  3. Non-executive or independent directors
  4. Risk managers
  5. Supervisors and managers
  6. Company secretary and CA
  7. General counsel
  8. Important executives managing a team

Who can buy D&O cover?

Any privately or publicly held company with a corporate board or advisory committee

How do I customise D&O cover?

A D&O cover can be quite exhaustive in nature and we, at Plum, help you customise the same as per your business settings. These requirements could either stem from a compliance or risk management perspective. Key customisable features include:

  1. Sum Insured - Defining the right limit of liability for the organisation
  2. Coverages - Side A, B and C. We can add more clauses and coverages by paying extra premiums.
  3. Territory - Can cover India, US and rest of world

What are the components of a D&O Cover?

  1. Side A - Directors & Officers Cover: This component covers the personal liability of Directors & Officers
  2. Side B - Company reimbursement claim: This covers the extent of losses incurred by the company to protect the directors & officers against the third party
  3. Side C - Company securities claim: This protects the company against the claim filed by the shareholders in connection with buying and selling or ownership of securities
  4. Add-on - Employment practice liability: Protect for losses incurred by insured in case of a suit by past, present or prospective employee in relation to “employment wrongful act

Can a member of the board of directors be sued or subject to a lawsuit?

Yes, as per the Companies’ Act, the director or officer can be alleged and held personally liable for their actions. Here are certain instances where litigation can be brought upon by:

  1. Employees - Accusations towards conduct of discrimination, harassment, wrongful termination related acts
  2. Creditors - Accusing the director of taking on debt even after knowing that the company is insolvent
  3. Competitors - Misleading and deceptive conduct/sabotage towards the competition
  4. Regulators/Gov. Bodies - Citations towards defiance of statutes 
  5. Customers - Third party or financial implications to our customers due to services rendered or decisions taken in the day to day functioning of the business
  6. Shareholders - For mismanaging funds/ ops of the company which went against the interests of the shareholders

Are my personal assets at risk if I serve as a director or officer or a member of board?

Yes, a director’s liability is unlimited under certain circumstances wherein they could be held personally liable on behalf of the company. E.g. - An instance wherein there is a of breach of fiduciary duty

Do I have to buy a different policy for each director?

No. A blanket D&O for the organisation covers all the key stakeholders and directors.

What is the duration for a D&O liability policy?

A standard and typical tenure for a D&O policy is 1 year.

Should small businesses take insurance D&O liability insurance policy?

Younger organisations just starting-up carry a much larger risk wherein any inadvertent expenses, may disturb the entire financials of a company, and more importantly destroy the reputation of such a company in the market, making it all the more difficult for one to survive.