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D&O Insurance

Who Needs D&O Insurance Cover?

By February 17, 2022February 19th, 2022No Comments

When a business is planning to purchase a D&O insurance policy, it is essential to understand its scope and who actually needs it. If you are a senior executive in charge of recommending a suitable D&O Insurance Policy to your company, then you should be aware of it, too.

It is mainly a corporate insurance policy

An important thing to keep in mind is the policy mainly concerns the corporate insurance. So, a relevant entity related to corporate management and running of business operations may require the policy. The policy document mentions the specific details about the list of entities on which the policy is applicable.

Public companies need it

Public companies need the policy to remain more secure in cases of lawsuits. There are different types of public corporations, operating at various scales. The policy is applicable to each of the companies, irrespective of the sector.

Private companies need it

Not only the public companies, but the private companies also require the policy for the sake of better corporate risk management. The D&O Insurance Policy works effective in favor of the private companies. In recent times, small private businesses in India have been purchasing the policy.

NGOs need it

If you run an NGO, then it also falls under the umbrella of corporate insurance. The D&O Insurance Policy is also applicable for NGOs. It is a practically effective policy that takes care of financial liabilities of an NGO in situations when it has to counter a lawsuit.

The current directors of the company

The current directors of the company fall directly under the applicability of the insurance policy. The document, in its final form, mentions the names of the directors. So, if you are currently one of the directors (or the only director) of a public/private/NGO company, then you can avail the features of the policy.

The previous directors of the company 

One of the amazing features of the policy is it is also applicable for previous directors. So, a person who is no more in the position of a director currently (but was previously), he can conveniently avail the benefits of the insurance. 

The future directors of the company

The D&O Insurance Policy is flexible enough to cover the legal expenses of even future directors of the company, in situations when they have to fight the lawsuits, hiring an experienced attorney. The policy has such provisions.

The non-executive directors of the company

In some cases, a company may have directors who are in non-executive designations. In such situations, too, the insurance covers them. Thus, the D&O Insurance Policy is also applicable for the non-executive directors of a public company or private company or even an NGO.

The company should clearly defined who is a director

It is the duty of the company to clearly define the post of the director and convey information about it to the insurer. The insurer takes into account the number of persons holding the post of the director for the company.

Managerial employees

The insurance policy has a more extensive applicability, beyond the directors of the company. The employees of the company who are at managerial positions also fall under the framework of the policy. The policy document of the insurance clearly mentions the managerial employees who can avail the benefits of the insurance.

Employees with supervisory roles

The employees of a company who have a supervisory role within the operational and regulatory framework of the company also need the insurance policy. The clauses of the policy tell about such provisions. There is no problem for them to get the benefits of insurance.

The company as a whole

The flexible provisions of the D&O Insurance Policy also make it possible for the company itself to avail its benefits. The policy documents transparently mentions that the company can receive the benefits of the policy, when it has to counter a lawsuit.

Decide the insurance amount

As a beneficiary, the company has to decide on the insurance amount it needs. It can consult with experts to calculate the amount, taking into account a wide range of financial factors. A clear assessment helps the business to reach a conclusion about the insurance amount it requires.

The policy mentions the coverage

The policy document of the D&O Insurance mentions the coverage. The document has all the relevant details that tell about the applicability of the policy. The list of situations where the benefits of the policy are applicable is mentioned. There is no trace of doubt anywhere.

The policy mentions the premium amount

The policy document of the insurance also mentions the premium amount the insured has to pay to the insurer. You should clear ideas about the premium amount you need to pay to the service provider from the beginning of the tenure.

Check out the cases when the policy is applicable

It should be a priority to check out the various cases in which the D&O Insurance Policy is applicable. The policy document enlists such cases in an organized manner. Go through the details. You will get the required ideas about the applicability of the insurance. 

Check out the cases when the policy is not applicable

It is also extremely important to check out the cases when the insurance policy is not applicable. The document of the insurance policy also has a list that mentions such cases or situations. Go through them. 

Place your queries to the insurer

Do not hesitate to ask questions to the insurer regarding the applicability of the insurance. There can be many dimensions of the policy. You need to have clear ideas about the overall dynamics of the insurance. Place your queries about the ways the insurance will work for you. 

Call a reputable insurance broker

You need to call a top-notch insurance broker, such as PlanCover to know more details about who needs the D&O insurance policy. The agency is a renowned service provider in the Indian market. You can collect valuable information about the applicability of the insurance policy from the agency. 

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