As an entrepreneur, you have to make decisions that will help your business grow and touch new heights. However, some of your choices might not turn out well. Unfortunately, this means the risk of lawsuits. Such lawsuits can cost you a considerable amount of money and time. But there are smart ways to protect yourself. And one such form of protection is to invest in appropriate directors’ and officers’ ( D&O ) liability insurance. This is the most cost-effective way to deal with any lawsuits. However, timely renewal of the D&O insurance policy is very important to avoid such losses.
What is D&O liability insurance?
In India, D&O liability insurance shields the personal assets of directors and officers. This comes in handy if your employees, customers, competitors, vendors, investors, or other parties sue them for alleged or actual wrongdoing.
Most D&O insurance policies for private companies offer 30 days of extended reporting at no additional premium, which gives you time to renew your policy. So, if a claim is reported within 30 days of your insurance expiring, but pertains to the period when you were insured, the insurer will pay it. If you want to extend the coverage of the D&O insurance policy for 12 months, you must pay 50% of the full annual premium.
To clarify, if a claim arises because of an incident that occurred after the policy lapsed, the insurer will not pay it. It is only the reporting period that is extended and not the period you were insured. The best option, of course, is to get insurance renewed in a timely manner.
Tips for timely and trouble-free D&O insurance policy renewal
Buy D&O insurance with a long-term view
Many policy-buyers make the mistake of buying a D&O plan for the short term. It is often an investor requirement and not taken seriously. However, if you plan to expand your business, you should consider D&O long-term insurance and plan accordingly.
Request renewal before expiry
Let’s say you bought a D&O plan for a year starting from 1 January 2020. It is due for renewal before 1 January 2021. Rather than waiting for your insurance provider to notify you, it is more efficient if you file a request to renew your insurance. You should do so a month before it expires, that is 1 December 2020. By doing so, you eliminate the worry about a possible lapse.
Check for insurance renewal alerts
Many insurance providers regularly alert their clients to impending policy expiry, because renewal is necessary to continue service. Keep an eye out for such notifications and renew your policy on time. However, some insurance companies do not notify you. That is why it is advisable when purchasing a policy to compare and choose one that offers renewal alerts. Alternatively, you could work with intermediaries that are particular about renewals.
How SecureNow can help
SecureNow not only provides you with quotes from different D&O insurance providers but also makes sure that you renew your policy on time. We can help you get the best D&O policy available in the market, one that covers your specific legal liabilities. In addition, we undertake to remind you when it is time to renew your insurance. This way, you do not lose out on coverage because you missed your renewal date.
