Director’s and Officers Policy (D&O)
Being a director or an officer of a company is a high risk profession. Directors and Officers work as the trustee of the company they serve and carry multitude of legal obligations that can result in loss exposures for any corporate wrongdoing. They can be held liable personally and financially for actual or alleged breach of duty in managing the affairs of a company and ensuring its compliance with the numerous laws and regulations that govern its operation.
The most relevant and frequent claims under the D&O policy made in India involve securities fraud, mismanagement of assets and employment practices in response to non-compliance, misrepresentations in public documents, non-conducive employment environment. Claims by employees, as well as other third parties, such as creditors and regulators, are also increasing in today's litigious environment.
Is there a Protection? Yes, the Directors and Officers liability insurance policy, shortly known as D&O Policy, provides indemnity to directors and officers for legal costs, damages and expenses incurred, arising from claims brought against them personally due to any wrongful acts in their managerial capacity. Wrongful acts include:
- Breach of trust
- Breach of duty
- Misleading statements
- Wrongful trading
Key Exclusions under D&O policy:
- Any deliberate criminal, dishonest or fraudulent act,
- Arising out of bodily injury or property damage
- Any claim arising out of known wrongful acts.
- Arising out of Contractual Liability based upon or attributable to any delay / failure to perform or complete any Professional Services