Directors and Officers Liability Insurance

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Organisations are under constant risk of lawsuits and third party claims if their key personnel commit any mistakes that cause a financial loss to third parties. Though the directors and officers of the organisation make decisions for the growth and development of the organisation, they might make mistakes which might incur lawsuits and hefty settlements. The company suffers the financial consequences of the mistakes of its directors and so, a director’s insurance policy proves to be a useful coverage.

The D&O liability insurance covers the settlements to be paid by the organisation along with any defence costs incurred. The policy comes with three basic coverage benefits which are as follows –

  • Side A cover, wherein the directors and officers are covered for the cost of lawsuits if the organisation becomes insolvent or files for bankruptcy. Thus, when the organisation cannot pay for the director’s liability claims, the policy steps in to do the same.
  • Side B cover, wherein the policy reimburses the third-party settlements which the organisation pays for its directors and officers.
  • Side C cover, wherein the policy covers the organisation itself against securities claims.

These three benefits are usually inbuilt in D&O liability insurance coverage. Moreover, policy extensions, called add-ons can extend the scope of coverage of the policy. These can become a part of the policy at additional premiums.

Additional Read: What is the D&O policy cost?

Can I include the add-on coverage after buying D&O insurance?

D&O insurance policy add-ons include

  • Coverage for the cost of public relations
  • Employment practices cover, also known as entity EPLI cover
  • Worldwide coverage
  • Coverage for retired directors and officers
  • Coverage for new subsidiaries of the organisation
  • Legal representation extension
  • Entity security extension
  • Joint Property Liability
  • Cover for the legal heirs and spouse of insured employees against possible liabilities
  • Special excess protection for non-executive directors
  • Outside directorship cover
  • Emergency defence costs
  • Bilateral discovery period extension, etc.

You can choose to add one or more of the available add-ons while buying the director’s insurance policy. However, once you have bought the policy, addition of extensions during the coverage duration is not possible. If you want to add the extensions after buying the D&O liability insurance coverage, you can do so at the time of renewal.

Coverage additions at the time of renewal

When you are renewing your policy, the insurance company allows you to change the coverage details. You can change the sum insured, policy extensions and also the add-ons. You can add or remove add-ons at the time of renewing. The renewal premium increases when you add an extension and the premium reduces when you remove any add-on.

Thus, to opt for add-ons after buying a D&O insurance policy, you would have to wait for renewal. At the time of renewing, you can add the required extensions and customise your policy.

SecureNow for your insurance needs

If you are looking for the best coverage for your D&O liability insurance coverage, you can take help from SecureNow. SecureNow would give you options of different D&O insurance plans which you can compare on the basis of the available extensions. You can then make your choice. You can take SecureNow’s help to find the most suitable add-ons for your D&O policy while renewing the same.

So, choose the relevant add-ons either while buying the policy or while renewing it and enjoy a comprehensive scope of coverage.

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