Directors and officers liability Insuranceoften called "D&O") is liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defence costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers.
Such coverage can extend to defence costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies. It has become closely associated with broader management liability insurance, which covers liabilities of the corporation itself as well as the personal liabilities for the directors and officers of the corporation.
The premium paid will depend on the client's profile, selected sum insured, information in annual report or balance sheet, degree of exposure, details about past and present functioning of the company, and other factors.
- Personal guarantee
- Pollution damage
- Slander and libel
- Exemplary or punitive charges, penalties and fines
- Any situation that exists beforehand inception of policy
- Any bodily injury , disease, sickness, or death of the insured person or damage to tangible property
- Directors and the company must give underwriters instant written notice for any claim
- They should not disclose the policy existence details without consent of underwrites
- They are not needed for contesting legal proceedings as counsel will advice on the same
- Settlement of any claim must be done on consent of underwriters only