Directors and officers liability covers a wide range of litigation that could arise from customers, vendors, shareholders,employees and general public. This board insurance also covers litigation arising due to acts of another company, where the insured is serving as a nominee director.
D&O insurance can provide worldwide coverage. If the company has operations abroad, it can provide worldwide coverage for both territory and jurisdiction. This could cover claims arising from shareholders based abroad, or suppliers and clients being headquartered abroad.
The Director liability insurance policy would pay for lawyers fees to defend a case in court. In addition, via add-on covers it can reimburse expenses to respond to a regulatory notice, investigation by authorities, and cost of hiring a PR consultant to minimize losses.
Directors and officers insurance carry an extension called Employment Practices Liability Insurance (EPLI) and Entity EPLI. Employees may sue for acts such as sexual harassment, and biased termination.Entity EPLI extension extends this coverage to the company as well.
Directors and Officers Liability Insurance, also called Directors Liability Insurance or D&O Insurance Coverage, is a liability insurance which protects the directors and officers (executives) of a company and their spouses, against the personal liabilities arising due to any legal action taken against them by employees, vendors, investors, competitors, customers or other parties for their action in their managerial capacity. A directors and officers liability insurance coverage can also provide for the legal fees and other costs the organization may incur as a result of such a suit.
Directors and Officers Policy is required to protect directors & officers of a company from personal losses which may arise due to decisions and actions taken by them as a part of their duties. Such risks include:
There are three types of insuring agreements of a D&O policy:
Directors liability insurance provides financial protection to the company in case of a claim against their directors, officers and key employees for an alleged wrongful act in a managerial or supervisory role. It provides coverage for defense costs, subsidiaries, outside directorship, retired directors, employment practice liability, regulatory crisis response, damage to reputation, heirs, estates and legal representatives, emergency costs, kidnap response; and so on. Any entity with a corporate board or advisory committee should consider buying a D&O Liability insurance, including non-profit organizations as this policy saves from unforeseen financial losses arising due to third-party liabilities.
Directors & Officers liability insurance policy offers numerous benefits. Some of the key benefits of this policy is that it provides cover for:
D&O Insurance policy covers directors & officers against:
Note: This is just an indicative list, complete list of inclusions will be part of the policy document.
D&O Liability Insurance Policy does not cover:
Note: This is just an indicative list, complete list of inclusions will be part of the policy document.
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