A directors and officers (D & O) insurance policy provides coverage against third party litigation.
These policies typically provide defense costs and pay certain judgements entered against officers and directors. The policy is normally obtained by the business entity which owns the policy and pays the required premium.
Generally, directors and officers are the persons legally responsible for managing the affairs of the company and through whom the company can legally act.
In many jurisdictions, it is the role of the person and not his title which determines whether or not he is a director or officer.
'Officer' in addition to the directors will normally include 'Managers' who are managing the affairs of the company
As Directors or Officers it is likely that they have a number of responsibilities and duties in their official capacity falling into the following four categories
Fiduciary:
This duty encompasses the director or officer's relationship of trust with the company. He must act in with honesty and good faith at all times.
Care and Skill: a director or officer must act with care and skill at all times in whatsoever duty he is discharging, regardless of the relative importance of the task.
Legal :
a director or officer must ensure that he abides on the company's behalf by all relevant statutes. Special attention must be afforded when the company comes under the jurisdiction of foreign courts.
Authority Limitations : the director or officer must act only within the scope of his powers and authority.
How can the performance of these duties give rise to claims?
Employees :can bring actions for alleged wrongful termination of employment, discrimination, and sexual harassment.
Customers, Clients and Consumer Groups :
can bring actions where a director or officer is held personally liable in a similar manner to the company for a product liability.
Competitors :can bring actions for alleged copyright and patent breaches.
Government bodies :
can bring actions in respect of the legal environment of a company. This would involve fraud, civil rights violations and licensing issues.
Shareholders :
can bring actions arising out of mergers, takeovers, financial disclosure, acquisitions and divestitures.
Any of the following could give rise to a Directors and Officers Liability Claims
Misuse of Corporate Funds
Tender Offer Suits
False Advertising Allegations
Political Contributions
Companies Act Violations
Misuse of Inside Information
Customers Suit
Actions by Creditors
Actions by Creditors-Derivative
Conflicts of Interest
Failure to Maintain Insurance
Anti-trust Violations
False Statements to Government Agencies
Auditing & Accounting Practices
Breach of Duty to Minority Shareholders
Quality of Management
Irregularities in Securities Issues
Nuclear Energy
Questionable Payments
Quality of Management
Most policies have two separate divisions 'A' portion and 'B' portion.
'A' portion, or, Side 'A' Coverage covers only the Directors and Officers.
A. The Insurer shall pay the loss of each insured resulting from any claim first made against the insured during the policy period for any wrongful act in the Insured's capacity as a Director, Officer or Employee of the Company except for and to the extent that the Company has indemnified the Insured .
'B' portion , or, side 'B' coverage (also known as entity coverage), covers the Corporation when the Corporation indemnifies its Directors and/or Officers. However, this does not cover the Corporations own liability.
B. The Insurer shall pay the Loss of the Company resulting from any claim first made against the insured during the policy period for any wrongful act in the insured's capacity as a Director, Officer or Employee of the Company but only when and to the extent that the Company has indemnified the Insured for the loss.
Costs & Expenses shall mean
Costs and Expenses shall mean all reasonable and necessary fees and expenses incurred by or on behalf of the Directors or Officers with the written consent (such consent shall not reasonably by withheld) of Underwriters resulting solely from the investigation and/or defence and/or monitoring and/or settlement of any Claim and appeals therefrom.
Costs and Expenses arising out of the prosecution (criminal or otherwise) of any Director or Officer or the attendance of any Director of Officer at any official investigation, examination, inquiry or other proceedings ordered or commissioned by any official body by reason of a Wrongful Act.
Costs and Expenses incurred by any shareholder of the Company in pursuing a Claim during the Period of Insurance against any Director or Officer of the Company which the Company is legally obligated to pay pursuant to an order of the court.
Costs and Expenses shall not mean salaries, commissions, expenses or other benefits of the Directors or Officers or Employees of the Company.
Claim shall mean
Any suit or proceeding brought by any person or organisation against an insured for monetary damages or other relief, including non-pecuniary relief
Any written demand from any person or organisation that it intends to hold a director or officer responsible for a wrongful act
Any criminal prosecution brought against the Insured
Any administrative , regulatory, official proceeding.
Legal Action or Litigation brought in a court of law within the Excluded Territories
Indemnity or payment which is available from any source, other than this Policy.
Any actual or alleged bodily injury, sickness, disease or death of any person or any actual or alleged damage to or destruction of any tangible property, including loss of use thereof.
Any actual or alleged seepage, pollution or contamination of any kind, provided, however, that Underwriters shall pay on behalf of the Directors and Officers Costs and Expenses incurred in any investigation, examination, inquiry, court of law or other proceedings ordered or commissioned in the first instance by any official body within India subject to a limit of Rs.50,000/-.
Any claim alleging gaining any profit or advantage or receiving any remuneration to which a Director / Officer was not legally entitled.
Return of any remuneration paid to Directors & Officers without the previous approval of the shareholders of the Company provided such payment is held by the court to be in violation of the law. This Exclusion does not apply to other Directors who are not guilty of such wrongful acts.
Claim made by any third party originating from or alleged to be a breach of any professional duty owed to such third party.
Claim arising out of any pension or superannuation scheme or programme.
Claim made by the Company or any Director or Officer or at the instigation of any person who is or was also a Director or Officer or agent of the Company. However this Exclusion shall not apply to any Claim make by or on behalf of any employee of the Company (except who is or was a Director) in respect of employment disputes.
Claim for taxes or fines or penalties or punitive or exemplary or multiple damages or any Claim deemed uninsurable under law.
Any claim brought about by circumstances prior to purchase of the policy which the Directors or Officers or the Company knew or ought reasonably to have known.
Legal liability of whatsoever nature arising from Nuclear Risks
Claim brought about by our contributed to by or consequent upon :
Loss or Destruction of or damage to any property whatsoever or any loss or expense whatsoever resulting or arising there from or any consequential loss.
any legal liability of whatsoever nature.
Claims arising out of dishonesty, fraud or malicious conduct of the Directors or Officers provided.
However policy will pay on behalf of the Directors and Officers
Costs and Expenses incurred in successfully defending proceedings brought in respect of such Wrongful Act.
Loss where the final judgement or other adjudication of the court hearing proceedings against any Director or Officer determines that he is legally liable in respect of a Wrongful Act on some cause of action which is not dependant on the existence of a dishonest, fraudulent or malicious purpose or intent and makes on finding that he was guilty of dishonesty, fraud or malicious conduct in relation to the Wrongful Act in question.
Immediate written notice of any circumstance, with full particulars, which may give rise to a claim.
Render all co-operation and information reasonably required
Not disclose existence of this policy unless required by law
Not to admit liability or attempt to settle or incur any cost and expense without consent.
Underwriters are entitled to take over defence or settlement of any claim in the name of Directors and Officers of the Company.
Not to contest any legal proceedings without advice of counsel appointed by mutual agreement.
Underwriters will not settle any claim without consent of Directors / Officers/Company. However, Liability under policy (including costs & expenses) will not exceed proposed settlement if consent is withheld.
If policy has an excess, fair and proper allocation of liability & costs will be made jointly by Underwriters/Company/Directors & Officers.
Underwriters are entitled to nominate a solicitor, barrister or attorney to represent Directors & Officers.
In the event of the takeover of the Company by or the merger with any other organisation the policy will cease immediately. Policy will apply to loss only prior to takeover or merger.
Alleged that defendants issued false and misleading statements with respect to the purported earnings and financial condition of the company.
National Health Laboratories Inc.
Settlement Fund : US$ 64,000,000
Alleged that National Health's 1991 10-K report(year end financials required under SEC regulations) and subsequent interim reports were false and misleading in overstating revenues and earnings due to the company's fraudulent and illegal Medicare and Medicaid billing policies
Policy Management Systems Corp.
Settlement fund : US$ 31,000,000
Alleged that the defendants issued financial statements, press releases and statements that were materially false and misleading because they misrepresented or failed to disclose materially adverse information.
D&O policies are usually 'manuscript policies'. It means that they are not standardised, and wordings differ from Insurer to Insurer. Therefore all D&O policies are not created equally hence, the necessity to fill in the correct proposal form.
Professional liability insurance, also called Professional Indemnity Insurance, protects professional practitioners such as Architects, quantity surveyors, home inspectors, Lawyers, physicians, and Accountants against potential negligence claims made by their patients/clients.This coverage focuses on the failure to perform, financial loss and error or omission of the products or services sold. Additional coverage for breach of warranty, intellectual property, personal injury, security and cost of contract can be added.
The primary reason for professional liability coverage is that a typical general liability insurance policy will only respond to a bodily injury, property damage, personal injury or advertising injury claim. But professional services and products can cause claims without causing a bodily injury, property damage, personal injury or advertising injury. Common reasons alleged in making claims on these policies are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.
Public Liability Insurance can cover your business for damages and compensation payouts along with any related legal fees in the event that your business has caused injury or death to a member of the public or damage to their property.
If your business deals with clients or members of the public, or if you come into contact with the public in the course of your business activities, Public Liability Insurance should be the top priority insurance cover on your list.
Clinical Trial Insurance
Research organizations carrying out clinical trials face the risk of legal liability to pay research subjects (Participants / Patients ) for the death, bodily injury, physical or mental illness, disease or impairment caused due to the research.
Clinical Trial Liability Insurance (CTLI) provides cover against legal liability arising out of lack of care, negligence resulting in injury or death of the subject. Insufficient/improper disclosure and conflict of interest may also become subject matter of suit.
The Cover
This policy will indemnify the insured against all sums for which he will be legally liable pay to any Research Subjects (Patients) for the death bodily injury physical or mental illness disease or impairment caused by the research. The policy will also pay for the costs & expenses incurred by the Insured in connection with the defense or settlement of any claim.
Required Documents:
· List of the names of the (Participants /Patients)
· Informed consent form from all the participants
· Confirmation of the usage of the drugs prescribed by WHO
· Company Profile
· Sum Insured / Period required
Shop keeper's policy or Shop Insurance is a comprehensive policy to cover your shops, which are exposed to various risks that threaten to result in significant loss and damage to property as well as business. This policy is specifically designed to cover all the risks and contingencies faced by you as a shopkeeper. It provides protection for the property and the interests of the insured and his partners in the business venture.
The sum insured depends on the value of your shop and the value of the contents of the shop. The value of the shop is calculated on the basis of the estimated cost of rebuilding it completely. The contents of the shop are assessed according to their value at the time of purchasing the shop insurance policy. The valuation would also include electrical and mechanical appliances in the shop..
Generally a Shop keeper's policy covers the following:
Fire & Allied Peril
Burglary & Robbery
Money
Plate Glass
Breakdown of Business Appliances, Apparatus, Equipments
Neon Sign / Glow Sign
Electronic Equipment
Fidelity Guarantee
Personal Accident
Public Liability / Workmen Compensation
Business Interruption.
TATA AIG's Credit Card Insurance solves the problem of an individual's responsibility for late realization of her/his credit card loss. Under this policy, a credit card customer is insured against any expenditure on his lost credit card made 12 hours prior to reporting the loss.
Which cards can be insured?
Credit cards
Debit cards
Amex cards-diners
Any bank's charge cards
Food cards
The Policy Covers :
Any unauthorized charges that the insured is responsible for on his/her lost or stolen payment cards up to 12 hrs. prior to first reporting of event to issuer.
More than one payment cards can be covered
Points to remember:
Cards need to be physically lost and phishing is not covered as a part of this policy
Internet purchases are covered if the card is stolen and fraudulent happens in the interim
Cash is not covered
Loss of report more than 12 hours are not covered
As IRDA licensed broker, We offer the following services at NO EXTRA COST to you
As a broker, we represent the customers and NOT any specific insurance company
We can analyse your annual insurance cover of various risks (group mediclaim, property insurance, liability insurance, etc.) to see if you have adequate cover without too much cover
We can help you reduce your total insurance expense by negotiating with various insurance companies on your behalf
Help you during claim process
In other words, we undertake all your insurance related services
In today's litigious society, even small mishaps can result in large lawsuits. That's why general liability insurance is essential for most companies. Liability insurance protects the assets of a business when it is sued for something it did (or didn't do) to cause an injury or property damage.
General liability insurance can be purchased separately or as part of a business-owner's policy (BOP). A BOP bundles property and liability insurance into one policy; however, the liability coverage limits are generally pretty low. Businesses that need more coverage usually purchase liability insurance as a separate policy.
The demand for products liability insurance has arisen because of the wide variety of products manufactured and sold to the public in the modern industrial society which products, if defective, may cause death, bodily injury or illness or even damage to property.
The indemnity only applies to claims arising out of accidents during the period of insurance and first made in writing against the insured during the policy period arising out of any defects in the products specified in the schedule and the insured is indemnified in accordance with the operative clause for and/ or arising out of injury Damage or Pollution but only against claims arising out of or in connection with any products specified in the schedule.
General Liability
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