Directors & Officers Liability:
D&O Liability Insurance Policy covers Individual Directors & Officers of a company against their Personal Liabilities whilst carrying out Administrative and Management Duties associated with running the Company. In other words, this is a " Managerial Negligence" policy cover.
A D&O Policy comprises of two Sections:
- The first Section protects the Directors personally when they cannot be reimbursed by the Company.
- The second section protects the Company but only when they are able to reimburse the
Directors or Officers
As per the standard D&O coverage:
The insurer will pay on behalf of the Director or Officer for loss resulting from a claim made against them arising out of a wrongful act committed in that capacity.
Such Loss includes Defense Costs and any award made by the courts.
By a Wrongful Act – we mean and include actual or alleged error, act, misleading statement, breach of duty. or any other matter claimed against the Directors or Officers.
Why D&O has now become a much sought after coverage?
This Public Liability Cover is restricted to the business premises only.
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- Because it protects the personal assets of directors and officers, since corporate indemnification is not always possible.
- Because it protects corporate assets from losses that may otherwise bankrupt a company.
- Because it assists in attracting and retaining talented directors and officers, by providing them with a protection for their personal assets.