Director Protector

  1. What is a Directors and Officers Liability Insurance policy?
    The D&O policy protects directors and officers from claims which may arise from decisions and actions taken within the scope of their official capacities. This policy covers the personal liability of directors and officers as also reimburses the company in the event that it pays the claim on behalf of the directors or officers in order to protect them.
  2. Who can sue a director?
    Any third party affected by the decisions of the directors of the company can sue including regulators, shareholders, investors, competitors, employees, business partners, customers, lenders, suppliers etc.
  3. Who is covered under the policy?
    Past, present and future directors (including independent directors), officers of a company and employees in a managerial or supervisory capacity are covered under the policy. The policy also extends to protect the spouses, administrators and executors of the insured’s estate as also coverage for outside directorships directed by the company.
  4. What does the policy cover?
    The policy primarily pays for defence costs and financial losses in the event of a claim. The policy also extends cover to costs incurred in the course of investigations by regulators and public relations expenses.
  5. What are the key extensions available under the policy?
    • Special excess protection for non executive directors
    • Automatic coverage for new subsidiaries
    • Emergency costs cover
    • Prosecution costs, bail bond expenses and public relations expenses
    • Kidnap response costs
  6. What are the key exclusions under the policy?
    • Dishonest and  fraudulent acts
    • Illegal remuneration or personal profit
    • Existing or known claims or circumstances
    • Property damage and bodily injury (defence costs are however available)
    • Insolvency – If Insured answered NO to STEP 2 (3) of the Short Application Form
  7. What are the most common claim scenarios in a D&O policy?
    Typical claims under a D&O policy include allegations of:

    • Breach of fiduciary duties
    • Mismanagement of the company’s operations or assets
    • Non disclosures and misrepresentations in a company’s private placement prospectus
    • Violation of various statutes and laws / Government Agencies
    • Misrepresentation during a sale of company’s assets
    • Conflicts of Interest / Deceptive Trade Practices
    • Creditor Claim / Loan Default
    • Conspiracy & Negligence
    • Dispute over Inventorship / Misappropriation of Trade Secrets
  8. What are the top 3 reasons to take out D&O cover?
    1. The owner’s personal net worth in private companies is tied to the financial health of the company making costly D&O liability claims devastating.
    2. D&O insurance from a quality insurer provides companies with access to quality attorneys with the relevant knowledge and expertise to defend you.
    3. D&O insurance takes care of costly defence costs, thereby ensuring that a company’s cash flow remains unaffected. The cost of defending corporate lawsuits may exceed the net worth of most private companies

Director Protector Application