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What does D&O insurance exclude?

QuestionsCategory: Directors & Officers Liability InsuranceWhat does D&O insurance exclude?
default avatarPlan Cover Staff asked 3 years ago
1 Answers

Best Answer

default avatarSrinivasan Mahadevan answered 2 years ago
Directors and officers can mitigate the risk of personal liabilities on them through various safeguards. But, the most ideal, and cost-effective mechanism is they obtain the “Directors and Officers Liability” insurance. This will help the directors to safeguard themselves in case of any claim arising from any third party due to their bonafide actions in the company.
In the wake of various corporate scams and initiation of legal proceedings it becomes very important for the directors to understand their duties and liabilities as a director in Indian regulatory framework. 
Directors and officers are bound by duty towards various stakeholders — shareholders, employees, creditors, customers, competitors, government and other regulatory bodies. 
Any breach or non-performance in the duties can result in claims against them by reason of any wrongful act, actual or alleged, in their respective capacities.

D&O liability insurance is intended to provide broad and sufficient coverage for policyholders and their officers. However, D&O policies do not cover all conduct and many contain a number of notable exclusions. 

The general exclusions under the policy include: 

  1. Claims normally covered under other or prior Insurance
  2. Personal Gain
  3. Insured vs. Insured
  4. Dishonest, Criminal, Fraudulent conduct. 
  5. Fines, penalties and Punitive Damages
  6. Defamation, libel and Slander claims
  7. Wilful or Intentional Wrongdoings. an insurance broker licensed by IRDAI has been supporting technology startups, small and medium businesses, not for profit companies and large companies with tailor made D&O liability insurances. You may reach out to them for getting your D&O liability insurance policy structured.