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typically, directors and officers insurance policies contain certain common (similar) policy features. of the following choices, which one is not a typical feature under a d&o insurance policy:

Questions › Category: Directors & Officers Liability Insurance › typically, directors and officers insurance policies contain certain common (similar) policy features. of the following choices, which one is not a typical feature under a d&o insurance policy:
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default avatarPlan Cover Staff asked 3 years ago
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default avatarSrinivasan Mahadevan answered 3 years ago
Company in isolation does not make decisions. The board of directors, officers and key managers are empowered to make business decisions in the interest of the company to create and add shareholder value. Irrespective of their business acumen, and skills, their decision sometimes can result in financial losses. The directors and officers who made the decisions can be held personally liable and can be involved in costly litigation. 
Directors and Officers insurance helps businesses in making decisions and not worrying about any such legal liabilities.

What does D&O insurance cover?

D&O insurance policy reimburses the financial loss arising as a result of a legal suit on individual directors & officers while discharging their fiduciary duties for the company.  Generic features  includes the following:

  • D&O insurance policies have retroactive date clause and provide coverage for any wrongful acts that occurred any time back to the retroactive date, but not for acts that occurred before that date.
  • D&O policy is issued as a claims-made policy that covers claims that are first made or reported during the policy period.
  • There is also a Discovery period, the period immediately after expiry of the policy period, which is extended under this policy. This period can range depending on the scope of such period required and can be extended up to 12 months, upon payment of additional premium.
  • Retired Directors and officers – Indemnify retired directors & officers for claims made against directors & officers.

However the following are not typical features under a D&O insurance policy: 

  • Any claim event that happens prior to purchase of Insurance
  • Dishonest, Criminal, Fraudulent conduct.
  • Professional indemnity claims
  • Bodily injury and product liability claims
  • Punitive Damages
  • Wilful or Intentional Wrongdoings
  • Personal Gain

 
 

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