No matter how big or small an organization is, it’s the directors and senior executives who make the key decisions. Within the scope of their regular duties, they do what they think is best for the growth of the company and in most cases, they look at the overall implications of their options before deciding. However, in some cases, their decisions could cause harm to various stakeholders, resulting in legal actions against them. This is where a Directors and Officers (D&O) liability insurance policy plays a vital role.
D&O insurance forms an integral part of the risk management strategies followed by most organizations. One might find organizations that do not buy this insurance today, but they can end up paying hefty amounts of money as compensation for lawsuits. A possible reason for their not investing in D&O insurance is the lack of awareness about this product. Many business owners are not aware of the wide range of benefits that this liability insurance policy offers.
To know more about the advantages of D&O insurance, continue reading here :
- Comprehensive Insurance Cover
The decisions of a company’s directors can impact various stakeholders, be it clients, end-consumers, suppliers, shareholders, or even employees. Take the case when the board of directors of a company decides to shut down an operational unit of the company, thereby creating unemployment for a team in the workforce. In this situation, these employees can file litigation against the directors of the company. If the company has D&O insurance, it gets coverage benefits for any compensation cost awarded as per the policy terms.
If relevant, you can opt for a directors and officer’s liability insurance policy, which covers lawsuits arising due to another company where the directors of your company are also serving as nominee directors.
- Multinational Coverage
Multinational expansion of a business comes with increased responsibilities and risks. Many Indian companies have today expanded their operations to cover multiple nations outside our country’s geographical boundaries. As an outcome of the expansion, if they gain shareholders abroad, the impact of the decisions of the directors and senior executives is experienced overseas. Since various countries have different laws related to director’s liability, in case a shareholder files a lawsuit in another country, things may become complicated.
To tackle such situations, you can opt for D&O insurance policies that provide worldwide coverage for both territory and jurisdiction. You are of course advised reading the complete terms of such a policy, and all its inclusion and exclusion clauses.
SecureNow offers D&O insurance policies from renowned insurance companies in India that provide worldwide coverage.
- All-Inclusive Defense Cost Coverage
Dealing with court cases filed against the directors of your company can cost you large amounts of money. These expenses include the fees paid to the defense lawyers hired, money that’s paid to the concerned regulatory authorities for investigation and even the cost of hiring a PR firm for reputation management. For any company, paying these expenses to defend its directors implies significant financial losses, which would get reflected in its financial report.
A significant benefit of buying the Directors and Officers liability insurance policy is that the insurer will pay for the defense costs. Other than the primary coverage benefits that you get with D&O insurance, you can choose from a variety of add-on covers to include cover for PR costs, investigation costs, and similar other expenses. Choosing add-ons will cause a slight increase in the premium of the selected policy. However, it is well worth paying the price for the significant benefits you get alongside.
To sum up, buying a D&O liability policy is beneficial for your company is not just one, but in multiple ways. If you need assistance in purchasing this policy, contact our expert team at +91-9696683999 or mail us at firstname.lastname@example.org.