Buy Directors & Officers Liability Insurance

Starting @ just Rs110/month*
  • Option for cover for One Company or floating on all companies if on Boards of different Companies
  • Financial protection to employers for wrong decisions of their Directors/officers
  • Side A Cover provides Liability against directors and officers for claims where the company refuses to or is financially unable to pay.
  • Side B Cover provides for the liability of directors and officers when the company does grant indemnification including legal defense costs to protect their corporate assets.
  • Side C cover, also called "entity coverage," extends coverage for the corporate entity itself for the wrongs of their Directors and Officers.
  • Continuity of cover for long tail claims by Retroactive Date and claims made provisions.
  • Customized plansAffordable prices
  • 24*7 SupportDedicated claims manager
  • Total CareAll round wellness benefits

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What is Director and Officers Liability Insurance?

People who run a company, like directors and top officers, have to make many big decisions for the growth of the company. Sometimes, these decisions can upset others, like investors, employees, or customers. If someone feels harmed or thinks a mistake was made, they might sue those leaders. That's where D&O Insurance comes in. It helps protect these decision-makers.

Directors and Officers (D&O) Insurance pays for things like lawyer fees and legal costs if a director or officer gets sued for something they did while working for the company. It doesn't cover bad things done on purpose, like stealing or lying. This insurance gives leaders peace of mind, so they can make smart choices without always being afraid of being blamed.

How Does D&O Insurance Work?

Imagine a company called GreenTech Solutions. It's a growing startup in India that makes eco-friendly products. The company has several leaders, including the CEO, named Rashmi.

01 What Happened?

One year, Rashmi made a big business deal with a supplier, but it did not work out properly or as they expected. The supplier turned out to be unreliable, and GreenTech lost a lot of money. Later, the investors and board members accused Rashmi of not doing proper research and blamed her for the loss. Some of them even filed a legal case against her personally.

02 How D&O Insurance Helped?

Luckily, GreenTech had Directors and Officers (D&O) Insurance. This insurance stepped in to help Rashmi in several ways:

  • Paid for her legal defense Priya didn't have to spend her own money to hire lawyers.
  • Covered the settlement cost If the case ended with a settlement, the insurance paid that too.
  • Protected Priya's personal savings and assets She didn't lose her home or personal money because of the case.
  • Helped the company's reputation Having D&O insurance showed that the company takes responsibility and protects its leaders

03 Why It Matters?

This example shows how D&O insurance can protect decision-makers from financial damage when something goes wrong in their professional role. It lets them do their job without fear of losing everything if someone disagrees with a business decision.

Importance/Benefits of Director and Officers Liability Insurance

Directors and Officers (D&O) Insurance helps protect the top people in a company like managers, directors, and officers. If someone sues them for making a mistake, this insurance can save their personal money and help the company stay strong.

Here are some benefits of D&O insurance:

  • Keeps their personal money safe If someone blames a director or officer and files a case, this insurance protects their personal savings by paying for lawyers and settlement money.
  • Pays for legal costs Even if the person did nothing wrong, going to court can cost a lot. This insurance pays for lawyer fees, court charges, and investigation costs.
  • Helps hire and keep good people Offering this insurance shows you care about your leaders. This makes it easier to find talented people and keep them in your company.
  • Protects company's money If someone sues, the company might have to pay first. This insurance gives that money back so the company doesn't lose its funds.
  • Covers government investigations Sometimes, government groups check if directors or officers followed the rules. This insurance also helps pay for those investigations.

Key Features of Directors and Officers Liability Insurance

This insurance offers many protections for company leaders. Here's what it can help with:

Key Features of Directors and Officers Liability Insurance
Pays legal fees early when someone files a case.Only covers claims made during the policy period (when the insurance is active).Let the insured person defend themselves with support.Covers company branches and smaller groups (subsidiaries).Protects directors working in other companies too (outside roles).Helps retired directors if someone sues them after retirement.Covers issues related to staff management, like unfair firing or workplace problems.Covers claims where leaders didn't supervise properly, linked to professional mistakes.Supports during government or rule-related crises (like investigations).Pays costs like bail money or legal bonds if a person is taken to court.Protects reputation if a case harms the public image of the person.Covers family members or legal heirs if the insured person passes away.Allows extra time to report a claim even after the policy ends (discovery period).Helps pay urgent or emergency costs, even before approval.Supports during kidnapping-related situations.Gives extra protection to non-executive directors (who don't manage daily work).Covers pollution-related claims, including shareholder complaints.Even covers when one insured person sues another in the same company.Protects those who didn't do anything wrong, even if others are guilty.

Types of Directors and Officers Liability Insurance

This insurance helps people who lead a company (like directors or officers) if someone sues them. There are two main types, and one extra option.

A Side : Protects the Individual

If a director or officer is personally sued and the company can't help (either it's not allowed or it doesn't have enough money), this part of the insurance protects the person directly.

Example: Shweta is the CEO. People blamed her for bad money decisions and sued her. Her company couldn't help pay her lawyer. Side A insurance paid all her legal costs so her personal money and belongings were safe.

B Side : Helps the Company

If the company pays to help its director or officer in a lawsuit, this insurance gives the company its money back.

Example: Rohan, the CFO, was sued for money-related issues. The company helped him and paid for his lawyer. Because they had Side B insurance, the company got that money back. So, they didn't lose much.

CSide : Entity Securities Coverage

Sometimes, people file legal cases directly against a company, saying it lied or was unfair while selling or trading its own shares (called securities). Side C insurance helps the company in these situations.

Example: Imagine a big tech company that makes software. Some people say the company gave wrong or false information when selling its shares. They file a lawsuit for fraud.

Now the company has to pay a lot of money for lawyers, court fees, and maybe settlements. Thanks to Side C insurance, the company gets help paying these costs. This saves the company money and keeps investors and customers confident.

Who Needs Director and Officers Liability Insurance?

Here are the people who can be covered by Director and Officers Liability Insurance:

  • 1 Company Secretaries These are the people who manage a company's legal and paperwork matters, like making sure the company follows rules and keeps records properly.
  • 2 Legal Heirs If a director or officer passes away, their family members or heirs can also be covered for any legal issues related to the person's past actions.
  • 3 Directors Directors of a company, who make important decisions, are the main people this insurance protects. It covers them if they face personal legal problems because of their decisions.
  • 4 Employed Lawyers Lawyers working directly for the company (like in-house lawyers) can also be covered by this insurance, as they give legal advice and support.
  • 5 Estate Representatives If a director or officer dies, their estate representative can be covered for managing any legal issues that come up.
  • 6 Officers Officers in charge of different parts of the company, like managers or supervisors, can get coverage to protect their personal assets.
  • 7 Spouses In some cases, the spouse of a director or officer may also be covered, especially if they are involved in the company's activities.

Note: The people who can be covered by this insurance may differ depending on the insurance company. It's a good idea to check with your insurer to find out exactly who is covered.

Risks of Not Having Cyber Risk Insurance

What does a Director and Officers Liability Policy cover?

Directors and Officers Liability Insurance helps protect company leaders if something goes wrong. Here's what it usually covers:

  • 1 Legal Costs

    If the director or officer is taken to court or investigated, the insurance pays for lawyer fees and other legal costs.

  • 2 Mistakes or Bad Decisions

    If a director or officer makes a wrong decision or gives poor advice and someone files a complaint, the policy can help cover it.

  • 3 Settlements and Penalties

    If the company has to pay money after a court case or to settle a dispute, the policy can help—unless it involves proven fraud.

  • 4 Complaints from Authorities or Shareholders

    If a government group (like SEBI) or shareholders believe the company was run poorly, this policy can cover the cost of handling those complaints.

Note: The insurance only covers up to a certain amount, depending on the policy. Always check the details with your insurance provider.

What does Director and Officers Liability Insurance not Cover?

This insurance doesn't cover everything. Here are some common things it usually does not cover:

  • 01

    Lying or Cheating

    If a director or officer does something dishonest or illegal on purpose, the insurance will not pay for it.

  • 02

    Fines and Penalties

    If the government or a regulator gives a fine or penalty, the policy usually won't cover it.

  • 03

    Claims Within the Company

    If one insured person (like a director) sues another insured person in the same company, it's usually not covered.

  • 04

    Injury or Property Damage

    The insurance doesn't cover physical harm to people or damage to things like buildings or equipment.

  • 05

    Old Lawsuits

    If a legal case started before the policy began (or before a certain date), it won't be covered.

  • 06

    Stolen Ideas or Secrets

    The policy doesn't cover problems related to stolen trade secrets, private company information, or intellectual property.

Note: These rules can change depending on the insurance company. Always check the policy document to understand what is and isn't covered.

What are the add-ons covered under the Director and Officers Liability Policy?

In addition to the main coverage, companies can add extra protection to their Directors and Officers (D&O) Insurance. These are called add-ons or extensions. Here are some common add-ons:

  • 01

    Emergency Costs

    If something bad happens suddenly (like a legal issue), this add-on helps cover urgent costs like:

    Paying a lawyer quicklyGetting expert adviceTaking action right away to protect the company or its leaders
  • 02

    Crisis Response

    This helps the company handle a serious problem that could hurt its reputation. For example:

    A scandal or bad news in the mediaA government investigationIt can pay for public relations experts and crisis managers to protect the company's image.
  • 03

    Mitigation and Avoidance Services

    This add-on helps stop problems before they get worse. For example:

    Getting advice to avoid a lawsuitFixing a mistake before someone files a complaintIt's like having a warning system and early help.
  • 04

    Assets and Liberty Costs

    If a director or officer is personally sued, this covers the cost to:

    Protect their money, property, or savingsDefend their personal freedom (like avoiding arrest or travel bans)
  • 05

    Kidnap Response

    If a company leader is kidnapped, this add-on helps with:

    Expert help to deal with the situationPaying negotiators or crisis teamsThis is helpful for companies in high-risk areas or those with high-profile leaders.
  • 06

    New Subsidiaries

    If your company starts a new branch or business, this add-on makes sure those new parts are also protected under the same insurance—without needing a brand-new policy.

  • 07

    Employment Practice Liability (EPLI)

    This protects the company and its leaders from employee-related claims like:

    Wrongful firingHarassmentDiscriminationIt helps cover legal costs and settlements for these kinds of cases.
  • 08

    Cyber Liability Extension

    With stronger data protection laws like the DPDP Act, 2023, companies can be fined heavily if personal data is leaked. This add-on helps with:

    Legal costs after a data breachCosts to notify users and fix the issueIt's important for companies that store customer data online.
  • 09

    Crime Coverage

    This protects the company from fraud by employees, like:

    Stealing money or assetsForging documentsIt's useful for startups and family-run businesses where these risks are often ignored.

Common Reasons Directors and Officers Might Get Sued

Directors and officers of a company can be sued for several reasons, including:

  • Directors and officers have a duty to act in the best interest of the company. If they fail to do so, they can be held responsible.

    Breaking their responsibilities

  • If they intentionally lie or deceive people for personal gain, they can be sued for fraud.

    Fraud

  • If they provide false or unclear information that harms others, they can be sued for giving misleading statements.

    Giving misleading information

  • If there is unfair treatment in hiring, firing, or promotions, they could be sued for poor employment practices.

    Problems with hiring or firing

  • Directors and officers could be sued for actions like sexual harassment or not promoting employees fairly.

    Bad behavior at work

  • If they do not follow the laws and regulations that apply to their company, they can face lawsuits.

    Breaking rules

  • If they fail to manage the company properly or don't follow good practices, they might be sued for poor corporate governance.

    Corporate Governance Issues

  • If they make decisions that benefit themselves instead of the company, they can be sued for having a conflict of interest.

    Conflict of Interest

  • If they fail to do something important, like not protecting company data, they can be sued for being careless.

    Negligence

  • If they spread false information about others that harms their reputation, they can be sued for libel or slander.

    Defamation

Who Can Take Action Against Company Directors and Officers?

Here are some people who can take action if they think the directors or officers of a company did something wrong:

  • 1

    Employees

    Workers can complain if they are treated unfairly, such as being discriminated against or if labor laws are broken.

  • 2

    Competitors

    Other companies can complain if the directors or officers act unfairly or break rules to hurt their business.

  • 3

    Suppliers

    People or companies that provide goods or services can take action if decisions by directors hurt their deals or partnerships.

  • 4

    Shareholders

    People who own shares in the company can act if they believe the directors made bad choices that hurt the company or its stock value.

  • 5

    Customers

    Buyers can complain if products are bad, ads are misleading, or the company treats them unfairly.

  • 6

    Other Stakeholders

    Others, like people in the community, lenders, or business partners, can also complain if they are harmed by the company's decisions.

How to Make a Claim Under Directors and Officers (D&O) Insurance

If you need to make a claim under your D&O insurance, follow these simple steps:

  • 1

    Inform the Insurance Contact

    Tell your relationship manager about the problem as soon as it happens.

  • 2

    Submit the Claim Form

    Fill out the claim form and send it with any important documents, like court notices.

  • 3

    Claim Registration

    Your relationship manager will send the information to the insurance company to start the claim process.

  • 4

    Claim Review

    The insurance company will check the claim. They may ask for more documents (called a "List of Requirements") and might assign an expert (like an investigator) to help. They will also give you contact details if you need help.

  • 5

    Claim Payment

    After the issue is settled (either through agreement or court), the insurance company will pay what they promised, based on the policy limits.

Why Buy Director and Officers Liability Insurance from Square Insurance?

  • 1

    Help with Claims All Year

    Our team is ready to help you with claims every day of the year to make sure the process is smooth.

  • 2

    Personal RM

    You'll get your own manager who will help you at every step.

  • 3

    Quick Help with Claims

    If something goes wrong, our expert team will help you report the claim and get fast support.

  • 4

    Custom Plans

    At Square Insurance, we help you choose the right policy that fits your company's needs.

  • 5

    Great Service

    Square Insurance is known for friendly and helpful customer service.

  • 6

    Good Prices

    We work with many insurance companies to give you great prices without reducing the quality of service.

Easy Ways to File a Life Insurance Claim

FAQs

Yes, a board member can be sued. People like shareholders, employees, lenders, customers, competitors, or even the government can take legal action against a board member if they believe something wrong was done.

The following people are protected by a D&O insurance policy:

  • A company's director, officer, or employee
  • A director working for another company (with permission)
  • A consultant chosen by the company's board
  • A lawyer working for the company
  • The insured person's husband or wife
  • Legal representatives, heirs, or people handling their estate after death.

It covers directors and officers if someone sues them for mistakes made while managing the company. It pays for legal fees and settlements if they are found responsible.

Directors and officers can be held responsible if they make wrong decisions that harm the company or others. They can be sued for misuse of power, breaking laws, or unfair treatment.

Usually, the company buys D&O insurance to protect its directors and officers. In some cases, individuals may also buy it for extra safety.

Shareholders, employees, customers, creditors, competitors, or government agencies can file a claim if they believe the director or officer did something wrong.

Directors are personally responsible if they break the law, misuse company money, or don't act in the company's best interest. They can be sued for these actions.

D&O insurance does not cover fraud, criminal acts, or if someone gets hurt or property is damaged. It also doesn't cover personal profit or illegal activities.

The cost depends on the company's size, industry, and risk level. It can range from a few thousand to several lakhs per year.