Directors and Officers (D&O) insurance policies are crucial for protecting the personal assets and liabilities of corporate directors and officers. However, in the event that a claim arises, it is important to understand the process of filing a claim under a D&O policy. The directors and officers are prone to several risks. Therefore, they must understand how to file a claim under D&O policy.
Let us understand the D&O insurance before comprehending how to file a claim under D&O Insurance:
D&O policy indemnifies the top level management of a company or organisation from the potential claim of a third party. The top level management are expected to make bold decisions for the growth of the firm. However, it may invite several claims from the people associated with the company. In order to mitigate such claims, the company provides its directors with Directors & officers insurance.
Let us understand the process of filing claim under D&O policy.
In the first step of how to file a claim under D&O insurance, the insured must inform the insurance company about the incident. The information must be given by filling out the claim form. The insured must obtain the claim form for the D&O policy.
It must be filled by the policyholder. After intimation of the claim, the insurance company shall start the claiming process. In addition, the insurance company is likely to guide the policyholder about the next step to be taken by the latter.
The insurer must be informed if any legal notice has been received by the policyholder. It is important to be intimated for the settlement procedure.
The insurance company shall investigate the cause due to which the claim has arisen. In addition, the investigator appointed by the insurance company shall investigate the extent of the claim. The investigation is important in order to interpret if the scope of the claim is covered by the policy.
The investigation shall further aid the insurance company to estimate the amount to be paid to the policyholder. The surveyor shall investigate the claim and make a report. Later, the report shall be sent to the insurance company. The report is likely to enable the insurer to proceed with the settlement of the claim.
The insurance company shall review the report made by the surveyor. The report shall be matched with the scope of the claim. Upon evaluating the claim, the insurance company is likely to settle the claim of the insured. However, in case of a deductible, the insurer shall settle the claim after the payment of the deductible from the end of the policyholder.
The following are the types of documents which are required to obtain the claim.
It must be filled by the insured.
The policyholder is required to furnish a copy of the policy along with the claim form.
The surveyor shall submit the investigation report to the insurance company.
The policyholder is required to furnish the invoice of expenses that have been incurred by him.
A copy of the court decree must be furnished by the insured.
Conclusion
Filing a claim under a directors & officers liability insurance policy is a complex undertaking. It is important to understand how to file a claim under D&O insurance. With the right knowledge and guidance, policyholders can protect their personal assets and navigate the process successfully.
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