Directors & Officers Liability Insurance (D&O Liability Insurance)

Directors and officers liability insurance provides coverage to the employees working at the designation of Directors or officers in an organization. This insurance work against claims arising out of any actual or alleged decision or action taken by them. Coverage also includes defense costs resulting from any criminal and regulatory investigations as well as trials.

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Features & Benefits of D&O Policy

Here are some of the features and benefits of D&O liability insurance:

  • D&O liability insurance provides blanket cover on an unnamed basis.
  • This insurance provides coverage for all ages of directors irrespective of designation, including retired, present and future directors.
  • Since officers are not defined in the policy working, this insurance policy provides coverage to one working at managerial or supervisory positions or someone on whose recommendation the board members act.
  • Any kind of legal hassle will be covered under D&O insurance.
  • Any civil or criminal action against directors and officers is covered.
  • The plan offers security in case of any alleged or actual error, omission, misstatement, breach of duty, or misleading statement.
  • Generally, investors consider directors and officers liability insurance as a pre-requisite for providing funds to a company.
  • There are some plans which extend the cover to employees as well as Independent nominee directors are accountable to stakeholders.

Directors and Officers insurance Coverage

D&O liability insurance provides coverage for the following:

  • Right to defend coverage
  • Coverage for subsidiaries
  • Coverage for outside directorship
  • Coverage for retired directors
  • Employment practice liability cover
  • Cover for negligence/ failure to monitor any claims related to professional indemnity
  • Regulatory crisis response coverage
  • Coverage for assets and liberty costs such as bail bond, prosecution, civil bond expenses, etc.
  • Damage to reputation cover
  • Coverage for heirs, legal and estates representatives
  • Bilateral discovery period cover
  • Emergency expenses coverage
  • Kidnap response coverage
  • Defense cost coverage
  • Advancement of defense expenses
  • Severability coverage
  • Special excess security for non-executive directors
  • Coverage for pollution-associated claims for defense expenses and shareholder claims

What Does D&O Insurance Not Cover?

D&O insurance does not provide coverage for the following:

  • D&O insurance does not provide coverage for any kind of fraudulent activity.
  • The policy does not provide coverage for any kind of coverage for intentional non-compliant activity.
  • No coverage for any personal profit or illegal remuneration.
  • No coverage will be provided if the action has been taken before the initiation of the policy.
  • Any kind of property damage or bodily injury is not covered.
  • Fines and penalties are not covered.

D&O Liability Insurance Risk Scenarios

Here are some of the scenarios under which D&O liability insurance can come in handy:

  • In case an organization incurs any losses due to erroneous actions or decisions taken by the directors and officers in fulfilling their duties according to the memorandum and articles of association.
  • In case of losses resulting from claims filed against them by any wrongful act in their capacity.
  • With the written consent of the insurance provider, any legal expenses resulting from the prosecution of any director or officer for any examination, inquiry, investigation, or proceedings by the concerned authority.
  • Any expenses incurred by the shareholder of a corporation for pursuing a claim accusing any director or officer and organization is lawfully obliged to pay as per the ruling of a court.
  • It provides indemnity to the legal heirs/legal representatives of the director or officer in case the director or officer becomes insolvent.
  • In case of sexual harassment, discrimination allegations, and other employment practice violations.
  • Exposures related to mergers and acquisitions.
  • In case of incautious investment choices.

Why is a Directors and Officers liability insurance plan required?

Here are a few reasons that make directors and officers insurance a necessity.

  • Vulnerability of stakeholder/ shareholder claims
  • Any kind of Discrimination, sexual harassment or allegations 
  • Accounting irregularities are one of the reasons that make it necessary to purchase d&o insurance
  • Regulatory investigations
  • Mergers and acquisitions-related exposures
  • Requirements of corporate governance
  • Compliance with several legal statutes

The plan is formulated, especially, to safeguard the legal claims for wrongful acts such as errors, omissions, misstatements, breach of duty, negligence, etc. of directors/officers while on duty. The plan caters to the directors, officers and the organization itself.

Who Can Get Covered Under D&O Liability Insurance

Here is a list of people who can get covered under D&O liability insurance:

  • Company Secretaries
  • Legal heirs
  • Directors
  • Employed lawyers
  • Estate representatives
  • Officers
  • Spouses
  • Contractors/Sub Contractors

How To Raise A Claim Under D&O Liability Insurance?

Follow the below-mentioned steps to raise a claim under cyber insurance:

  • Inform Insurer: Inform your insurer as soon as any legal complaint has been filed.
  • Keep Documents Ready: When you will raise a claim the insurer will ask you to submit a set of documents along with the claim from so keep them handy.
  • Fill-in Form: Ask your insurer to give you the claim form to fill it up and submit it as quickly as possible.
  • Inspection: The insurer will send a team of inspectors to check if the reason behind raising a claim is valid and within the range of coverage provided by the insurance company or not.
  • Compensation: Once the inspector gives a green signal, the insurer will provide compensation as specified in the policy.

How To Renew D&O Liability Insurance?

To renew your Directors and Officers liability insurance coverage, follow the below-mentioned steps.

  • Step 1: Go to the Policybazaar Insurance Brokers Private Limited official website.
  • Step 2: Fill in your policy number to get into your account
  • Step 3: You can add or remove any add-on if you want as you can do it only either at the time of purchasing the policy or while renewing it
  • Step 4: The premium amount of your updated insurance plan will be shown as per your addition or removal of any add-on
  • Step 5: Click on the “Renew” button
  • Step 6: Make the payment using your debit/credit card, UPI or net banking
  • Step 7: Once the payment is done, the insurance company will send the updated insurance policy’s soft copy to the registered email. Apart from this, a hard copy of the policy is also sent to the registered home address in a few days

To avoid the cancellation of the policy, make sure to renew your cyber security insurance on time

D&O Liability Insurance- FAQ's

  • Q: What is directors’ & officers’ insurance?

    Ans: As Directors or officers face a high-risk in their profession, it is important to be covered under an insurance cover. Directors’ & Officers Insurance protects the insured against defense costs arising from any criminal or regulatory investigations. However, intentional/deliberate illegal activities are not covered under this policy.
  • Q: What are the conditions/situations covered by directors and officers liability insurance policy?

    Ans: Some of the conditions that make this insurance plan a must-buy for the Directors and Officers are:

    1. Susceptibility to stakeholder claims

    2. Authoritarian investigations

    3. Irregularities related to accounts

    4. Sexual assault, employment violations or discrimination accusations

    5. Exposures associated with acquisitions and mergers

    6. Requirements related to Corporate Governance

    7. Compliance with a range of legal statutes

  • Q: Who can use this policy?

    Ans: This policy can be used by-

    1. Employees

    2. Suppliers

    3. Competitors

    4. Regulators

    5. Customers

    6. Shareholders

    7. Other stakeholders

  • Q: Who does the cover apply to?

    Ans: The cover is applicable to former, present and future members of the board of directors, top management or any employee performing a supervisory role.
  • Q: What are the exclusions of this plan?

    Ans:

    1. Illegal personal profits, payments or advantages

    2. Claims against bodily injury or property damage

    3. Violation of legislations regarding insider trading

    4. Penalties, fines or multiple damages

    5. Fraudulent act or omission or willful violation of official norms

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Director Officers Liability Insurance Reviews & Ratings
4.5 / 5 (Based on 18 Reviews)
(Showing Newest 10 reviews)
Juhi
Faridabad, April 10, 2022
Legal cover
I was looking for a directors and officers liability insurance online. I wanted to cover the working officials with a legal coverage in case any of the customer sues them after getting affected by any of their decisions. So it went on to the Policybazaar website where i could get a plan that provides me with legal coverage. Thanks Policybazaar.
Mukesh
Kannur, April 07, 2022
Legal cost covered
I got the directors and offiers of my organization covered under the directors and officers liability insurance policy. It covers the legal cost in case anyone sues the diector or officer for any decision made.
Punit
Bikaner, April 04, 2022
Easily renewed
I purchased DandO insurance plan an year ago and it was about to expire so i went on the Policybazaar and filled my policy number and accessed my account and easily renewed the insurance plan.
Tarun
Amritsar, April 01, 2022
Easily renewed
I purchased a DandO insurance policy online an year ago. It was about to expire so i had to look for a website where i can easily renew it. I went on the Policybazaar website and easily renewed the policy in a matter of seconds. Thank PB
Kishan
Bareilly, March 29, 2022
Compared and Bought
Was looking for a Directors and officers insurance policy online. I landed on the Policybazaar's website and trust me it is the best website as it lets you compare different plan on one page and then purchase the one that suits your requirements.
Ankit
Ranchi, March 27, 2022
Needed coverage
Coverage for your employees is a must. Under the Directors and officers liability there is employment liability cover which serves for us both. It is a needed coverage for the firms.
Mahesh
Gwalior, March 22, 2022
Perfect for us
Under Directors and officers liability coverage for subsidiareies and for the retired directors is there as well. It is a perfect one for the firm. I spred no time in purchasing one for mine from PolicyBazaar.
Vijay
Hamirpur, March 17, 2022
Wide range
This Directors and officers liability insurance that we have bought from PolicyBazaar provides us coverage for employment liability as well as for the retired directors as well. It has a really wide range of coverage that suits us well. I am happy with the purchase.
Dinesh
Ludhiana, March 12, 2022
Helpful coverage
Our Directors and officers liability provides us coverage for the subsidiries as well. That was really helpful. We got what we needed from PolicyBazaar.
Anjali
Kochi, March 07, 2022
many benefits
We have secured our corporation against various irregularies and liabilities using the D&O Liabilities. Thanks to policybazaar that we got it on such a good premium. We also got some other benefits with it.
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