What is Directors & Officers Insurance?

Directors and officers (D&O) insurance is liability insurance which covers or protects Directors, Officers and Employees of company from claims which may arise from decision and actions taken while serving their duty. It covers legal defense costs or other costs incurred by company in defending such individual against lawsuits.

Directors & Officers can be sued or alleged for wrongful acts related to:

  • Breach of duty, breach of trust, misstatement or misleading statement, defamation, libel or slander, act of omission or negligence.
  • Employment process or inappropriate workplace conduct such as discrimination, retaliation, defamation, failure to promote, sexual harassment etc.
  • Claim solely because of their status.
D&O policy
D&O Insurance

Who needs it?

Any privately or publicly held company with corporate board or advisory committee should take D&O policy to protect their Director’s, officers and employees.

Why ICICI Lombard?

The need of Directors & Officers Insurance is more than ever before due to the following reasons

1

Expertise in risk minimization and mitigation

2

Special value added services team dedicated for risk advisory and safety installations

3

Speedy claims settlement with single documentation

4

Financial strength and supreme claims paying capacity

Why do you need it?

Directors and officers are legally responsible and bound by duty towards various stakeholders like shareholders, employees, creditors, customers, competitors and government or regulatory bodies.

Any breach or non-performance in the duties can result in claims against directors, officers and employees by reason of wrongful act and need to incur various expenses like defense costs, damages or compensation and other incidental costs. This can affect company’s growth and performance.

This policy will protect against such expenses, losses and claims.

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What is covered by Directors & Officers Insurance?

Below are the detailed inclusions and exclusions of our Directors & Officers Insurance

  • Covers Directors and officers for claims where the company refuses to or is financially unable to pay for loss and the Directors and officers have to protect themselves, against demands, legal suits, allegations
  • Covers company under Employment practice liability (EPL) from wrongful acts arising out of allegations and legal suits related to employment process or inappropriate workplace conduct such as sexual harassment, gender or caste discrimination, retaliation, defamation, failure to promote, etc.
  • Impact damage of any kind, i.e. damage caused by impact of, Covers costs incurred by the insured company in defending such individual against losses.falling trees, aircraft, wall etc.)
  • Claims arising out of Bodily injury and property damage
  • Policy will not cover Salaries, wages, personal expenses, benefits or overhead expenses of an Insured Person.
  • Claim arising out of Public/private offering of securities.
  • Claims arising out of Crime, Fraud and Personal Conduct
  • Claim made by Major shareholders against other insured persons

Get answers to common questions about Directors & Officers Insurance

Need for D&O Policy?

Directors and officers are legally responsible and bound by duty towards various stakeholders like Shareholders, employees, creditors, customers, competitors and government or regulatory bodies. Any breach or non-performance in the duties can result in claims against directors, officers and employees by reason of wrongful act. This can affect company’s growth and performance.
This policy will protect against such losses and claims.
Yes, Member of Board of Directors can be sued. Any stakeholders like Shareholders, employees, creditors, customers, competitors and government or regulatory bodies can sue a particular member of the board.
Yes, as per the companies’ act, the Director or officer can be alleged and held personally liable for their actions.
Yes, the liability of director is unlimited resulting loss of personal assets at time of insolvency or any claim. This policy will protect personal assets of director.
Following parties are insured under D&O policy:
  • Director, Officer, or employee of a company.
  • An outside entity director.
  • A consultant as member appointed by company’s board.
  • Trainee
  • Employed Lawyer
  • Spouse of insured person.
  • Administrator, heirs, legal representatives.
A director and officer is person who holds a managerial or supervisory position in the company. The concerned person can be member of board of directors or part of organization’s management.
Any privately or publicly held company with corporate board or advisory committee should take D&O policy to protect their Directors, officers and employees.

What does a Directors and Officer’s (D&O) Policy covers?

The D&O policy covers personal liability of directors, officers and employees arising due to wrongful acts while performing duty. It also covers defence costs and other expenses incidental to a loss.
The policy will only cover civil fines and penalties levied on an insured due to violation of laws or regulations and when such fines and penalties are insurable by law.
  • Entity is covered under Employment practice liability (EPL) coverage. Which protects company from claims arising out wrongful acts of employment process or inappropriate workplace conduct such as discrimination, retaliation, defamation, failure to promote, sexual harassment etc.
  • Entity Security cover corporate entity when claims are made against the entity in conjunction with securities it has issued.
  • Addon covers may be availed by paying additional premium.
  • Yes, Entity is covered under Employment practice liability (EPL) coverage. Which protects company from claims arising out wrongful acts of employment process or inappropriate workplace conduct such as discrimination, retaliation, defamation, failure to promote, sexual harassment etc.
  • Entity Security cover corporate entity when claims are made against the entity in conjunction with securities it has issued.
Yes, It covers legal defence costs. It covers defence cost for breach of occupational health and safety laws, including workplace death.
The policy will only cover civil fines and penalties levied on an insured due to violation of laws or regulations and when such fines and penalties are insurable by law.
  • Insured’s name and address
  • Audit report of company
  • Share holding pattern

Only directors and officers covered in D&O insurance policy?

Following parties are insured under D&O policy:
  • Director, Officer, or employee of a company.
  • An outside entity director.
  • A consultant as member appointed by company’s board.
  • Trainee
  • Employed Lawyer
  • Spouse of insured person.
  • Administrator, heirs, legal representatives.
Yes, Small businesses and companies are most vulnerable to financial damage from litigation fees than large company with more money and resources. However, proprietorship firms may not buy as the ownership is individual.
The D&O policy is only of one type. The one which is purchased by corporate entities to protect their directors, officers and employees. The policy is quite customizable and one should take relevant coverage in the policy.

What is the claim settlement process?

Claim Information:
On mail
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LOR Request:
List of requirements to be share by the sales team
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Submission of internal reports:
To be submitted by insured
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Investigation Reports:
Final claim amount to be shared with final investigation report
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Seeking Documents:
DV to be signed by insured
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Remittance:
Payment of claim amount
  • Insured’s name and address.
  • Audit report of company.
  • Share holding pattern.

UIN No. IRDAN115RP0001V02200607