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Directors’ & Officers’ Liability
Why should you buy Directors’ & Officers’ Liability Insurance? Did you know even a frivolous suit against you could cost you a bomb? Would you pay out of your pocket if you were dragged to the court for an allegation in your capacity as the director of a company? While the directors work day in, day out to improve the value of the shares of a shareholder (earning them big bucks), doesn’t the shareholder have an obligation to at least protect its directors and officers from potential liabilities that could arise? God forbid, if your company goes bankrupt, are you prepared to pay the creditors who could sue you?
Be it private or public, zero possibility of having no D&O claims is almost non-existent in today’s time. Gaining an understanding of your business/ company, we not only provide you in-depth knowledge of the risks that could potentially arise but also guide you on how you can have them all covered!
Who can potentially sue
the directors and officers?
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Shareholders
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Consumers
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Competitors
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Creditors
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Public/ regulatory authorities
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Employees
Who is covered?
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Former, present and future directors
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Parent company and existing subsidiary companies
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Outside directors, nominee directors
Some examples of wrongful acts
that could result in legal liability:
Mergers and acquisitions
•Misleading statements filed with stock exchanges
•Unfair dismissal of an employee
•Unwarranted dividend, salary, compensation payments
•Misusing confidential company information
•Mismanagement of funds
Unfair allotment of shares
•Any act leading to conflict of interest
•Lack of judgment, diligence, good faith
•Errors in actual accounts
•Inaccurate statement of financial condition
What is covered?
The policy pays on behalf of the company any amount, which it is required to pay on behalf of the Directors and Officers in respect of legal actions alleging wrongful acts committed by them, including:
•Legal costs in defending allegations or suits brought against Directors alleging wrongful act.
•Bail bonds
•Official investigation costs
What is not covered?
Dishonest/fraudulent act
•Criminal behavior
•Professional liability
•Willful infringement of law
•Libel, slander, defamation
•Loss from trading of securities of the insured corporate by Ds & Os
•Bodily injury/property damage
•Failure to affect or maintain insurance
•Hostile takeover
Improper gain
•Fines, penalties, punitive damages
•Pension plans, employees benefit plans
•Environment damage/pollution
•Loss covered by other insurance
•Nuclear perils and war
•Known losses/claims/wrongful acts before the commencement of policy
