Are you a small business owner in India? Do you need insurance that will protect the assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More of the company and also the assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More of your directors and officers? If the answer to both the questions is YES, then you need a D&O insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More.
The board of directors plays a prominent role in corporate governance. It is responsible for directing and overseeing the business and management of the company. Considering this pivotal role, directors are considered as fiduciaries in that they are required to act in the interest of various constituencies in a company rather than for personal or self-interest or gain.
Directors’ duties and liabilities have garnered substantial attention in India lately. The new Companies Act, 2013 (the 2013 Act) is a landmark piece of legislation that clarifies, redefines and enlarges the ambit of directors’ duties and liabilities. This legislation is being supplemented by revised corporate governance norms that have been announced by the Securities and Exchange Board of India (SEBI) with a view to creating consistency between the 2013 Act and SEBI’s governance norms that apply to public listed companies.
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D&O benefits small businesses in multiple ways
Directors and Officers (D&O) Liability Insurance provides for financial protection in the event of a claim alleging a wrongful act in a managerial or supervisory role of the director, or an officer in the organization.
“Wrongful Act” means;
any actual or alleged misrepresentation, misstatement, misleading statement, error, omission, defamation, negligence, breach of warrantyIn insurance, it is an undertaking by an insured person that something will, or will not, be done. More of authority, or breach of duty means.
There are numerous ways in which D&O benefits small businesses, located across India. It is good to know about the advantages of the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More before buying it. The industry has witnessed many small businesses purchasing the D&O policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More in recent years.
Indian SME sector is waking up to D&O insurance
There has been a rapid increase in the popularity of the D&O policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More among small businesses, especially in the SME domain. Companies are now eager to know more details about the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More and avail its benefits to the fullest extent, in times of financial hurdles and crisis.
Suitable for directors and officers
The D&O insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More from a reliable insurer is perfectly suitable for the directors and officers of small business. The benefits help the business to hold its position in the industry and remain competitive. It helps in the long run.
Understanding the applicability of the D&O
It is a priority to understand the extensive applicability of a D&O insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More, in the case of a small business facing a lawsuit. You need to go through all the relevant documentation that gives clear ideas about the applicability of the insurance.
Reading the terms and conditions
It is also hugely important to read the terms and conditions, as mentioned in the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More document of the insurance, along with knowing the benefits of the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More. When you are sure about every aspect of it, there is no problem in recommending the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More to the company.
Check out the list of exclusionsSpecific conditions listed in an insurance or medical care policy that is not covered by benefit payments. Common exclusions include More
The small business needs to mandatorily check out the list of exclusionsSpecific conditions listed in an insurance or medical care policy that is not covered by benefit payments. Common exclusions include More. ExclusionsSpecific conditions listed in an insurance or medical care policy that is not covered by benefit payments. Common exclusions include More are cases in which the applicability of the D&O insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More is not valid. The small business should be extremely aware of the list of exclusionsSpecific conditions listed in an insurance or medical care policy that is not covered by benefit payments. Common exclusions include More.
Benefit 1: Fighting lawsuits comfortably
A shareholder or customer can file a lawsuit against the directors/officers of the small business, alleging a wrongful act or an act of misappropriation of data or any other relevant reason like corporate manslaughter or ill returns on investment. A third party vendor can also file a case.
The small business needs to remain prepared to fight the lawsuit. The D&O insurance effectively takes care of the legal expenses to fight the case. The small business does not have any trouble whatsoever.
Benefit 2: Attracting good talent
When a small business wants to grow at an accelerated rate, it needs to have a top-quality human resource. The company has to attract good talent from the market. How can it be done? One of the ways is getting a D&O policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More from a reliable insurer.
When talented people are aware of the fact that they can confidently take decisions in the company, as they have backing of insurance coverage for lawsuits, they feel protected. They find the company attractive to work for. So, the presence of insurance is able to attract excellent talent from the market.
Benefit 3: Getting investors
Yet another impressive benefit of the D&O insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More is that it gets investors for the small business. The insurance provides a more corporate touch to the company. The small business becomes more professional with the back-up of the D&O. The investors take note of this.
Angel investors become more interested in putting money in the business, when they are aware that the assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More of the company or its higher management will not be at stakes when the company, by any chance, faces a lawsuit. Hence, a small business can easily strengthen its prospects by availing the D&O insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More.
Benefit 4: Shielding the assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More of the directors/officers
The D&O insurance policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More is incredibly effective in saving the personal assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More of the directors/officers of the small business. During lawsuits, the insured does not have to remain bothered about digging through personal assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More to cover the costs of an attorney and legal experts.
The insurance has provision for the coverage of legal expenses. There is no need to pay the fees of an attorney. The clauses of the policyThe legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy More clearly mention the features that protect the personal assetsAssets refer to “all the available properties of every kind or possession of an insurance company that might be used More of the directors/officers. The insurance creates a safety net.
Explore the offers from a good insurance broker
It is wise to study the beneficial features of different D&O policies, by consulting a renowned insurance broker like PlanCover. The agency has expertise in the insurance market of India. It also has the required certification from IRDAI. Get in touch with it.
