Directors & Officers Liability Insurance


This covers the personal liability of Directors and Officers from the management of a corporation. It aims to protect their personal assets when they are alleged to have made wrongful actions or decisions.

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DIRECTORS AND OFFICERS LIABILITY INSURANCE

D&O Insurance covers you for personal liability that arises from your management of a corporation/foundation/association. It aims to protect your personal assets when you are alleged to have made wrongful actions or decisions.

COVERAGE

The Insured
• Past, present and future directors and officers of the company
• Position being held at the time the act was committed
• Directors and officers of the company and its subsidiaries (except for subsidiaries with a separate cover)
• Directors in affiliate companies but only those representing the interest of the insured company and its subsidiaries; does not cover directors of other shareholders
• Retired directors cover in case of non-renewal or non-replacement of policy

Wrongful Act
• Allegation or Actual
• Breach of duty, Breach of trust, Neglect, Error, Misstatement, Misleading statement, Omission, Breach of warranty or authority or Other act done or wrongfully attempted by any director or officer
• Capacity as director/officer

Claims Made Policy – indicates that the wrongful act should be within the policy period
• Date committed
• Date discovered
• Date reported to insurer

Retroactive Cover
• Full : claims-made policies that eliminate coverage for claims produced by wrongful acts that took place prior to a specified date, even if the claim is first made during the policy period; from the date of the company ’s incorporation (subject to insurer’ s approval)
• Inception date: from the inception date of the first policy issued

Known Acts and Circumstances –means insured ’s
• Duty to disclose
• Prior to policy period or continuity date –not covered

Loss that the insured may incur, the D&O policy will pay for:
• Damages awarded or judgments entered
• Settlements negotiated with the insurer ’s consent
• Legal cost and expenses awarded vs. the insured but only in connection with a judgment which is covered in accordance with the policy terms
• Defense cost (including defense cost for employment-related/ labor cases)

Claims – policy cover claims filed against directors and officers
• Only the director/officer is protected. Does not cover the company liability. Options to include Entity/ Company Liability for Employment Practices and Securities Claims only (under stand-alone D&O Policy).
• Administrative proceedings – legal compulsion to attend; defense cost cover; no wrongful act but an inquiry is conducted e.g. inquiries conducted by government agencies.
• Civil proceedings – both defense cost and award of damages regardless of the outcome of the case
• Criminal proceedings
– In case of acquittal – defense cost claimable against the policy
– In case of conviction – defense cost should be returned to the insurance company as criminal acts cannot be insured

D&O Insurance Coverage Benefits
• Protects the personal assets of the directors and officers and those of their spouses and estates.
• Protects the balance sheet of the company.
• Attracts and retains qualified outside/independent directors.
• Ensures funds are available for the defense of the directors and officers when the company ’s resources are not available.

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