Directors & Officers Liability Insurance

Directors & Officers
Liability Insurance

Get ₹1 crore insurance cover starting
at just ₹10,000 per year* for your business

*T&Cs apply

Small Business, Big Protection!

You’re a dedicated SME business owner who has poured heart and soul into your company. One day, a decision made by your Board of Directors comes under scrutiny, and a lawsuit is filed against both the board and you personally as an officer.

Without Directors & Officers Insurance, your personal assets and hard-earned savings could be on the line. But with the right coverage, you can defend yourself and your business without the crippling financial burden.

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What is D&O liability insurance?

Directors & Officers (D&O) insurance offers comprehensive protection by covering legal defense expenses and financial damages stemming from allegations and lawsuits involving the Board of Directors and officers within your organisation. With the rising prevalence of D&O claims, individuals in leadership roles face an elevated risk of personal liability.

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Who is covered?

The policy offers broad coverage, encompassing a range of individuals within the company, such as:

Executive directors
Company secretaries
Non-executive directors
In-house lawyers
Shadow directors
Risk managers
Prospective directors
De facto directors

Any member of the supervisory or management board
Employees in key management roles e.g. CTO, CFO, CMO, CXO

Who is covered?

The policy offers broad coverage, encompassing a range of individuals within the company, such as:

Executive directors
Non-executive directors
Shadow directors
Prospective directors
Any member of the supervisory or management board

Company secretaries
In-house lawyers
Risk managers
De facto directors
Employees in key management roles e.g. CTO, CFO, CMO, CXO

It’s crucial to note that the coverage provided by this policy is not tied to individuals’ names but extends to anyone who holds the designated positions of authority (D&Os) within the company throughout the policy period.

Further, lawful spouses, estates, and legal heirs are also covered.

We’ve forged partnerships with India’s foremost insurers and the world’s largest AA-rated reinsurers to deliver this important product to companies like yours.

We’ve forged partnerships with India’s foremost insurers and the world’s largest AA-rated reinsurers to bring this important product to companies like yours.

Nature of risks that D&Os can get exposed to

Directors and Officers can be exposed to a variety of risks, including:

Lawsuit by Shareholders and Investors

Shareholders can file lawsuits against D&Os for alleged mismanagement, breach of fiduciary duty, or financial misconduct that may harm the company’s value or their investments.

Regulatory Investigations

Government agencies and statutory bodies like SEBI, ED, SFIO, EOW , RBI etc., may investigate D&O for compliance breach related to GST filing, labour laws, audit, revenue accountings etc., leading to potential legal actions.

Employee Claims

D&Os can face lawsuits from employees for issues like wrongful termination, discrimination, harassment, or violations of employment laws.

Competitor Litigation

Rival companies might initiate legal actions against D&Os for alleged unfair competition, intellectual property infringement, or trade secret theft.

Crisis Management

During crises such as product recall, accidents or scandals D&O may face scrutiny and legal actions citing failure to exercise due care, skill, and diligence.

Cybersecurity Breaches

In cases of data breaches or cyberattacks, D&Os may face claims related to their oversight of the company’s data security measures.

Mergers and Acquisitions

D&Os involved in mergers, acquisitions, or other significant corporate transactions may face legal challenges if shareholders or stakeholders believe the process was mishandled.

Creditors' Claims

Creditors can sue D&Os if they believe that actions taken by the leadership negatively affected the company’s financial standing and their ability to recover debts.

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The Power of D&O liability Insurance

An investigation into alleged financial irregularities, such as delayed financial reporting and statutory auditor registration, has been launched against a prominent startup. Additionally, the ED has initiated inquiries into suspected irregularities in the company, casting doubt on the company’s reported figures.

The presence of a Directors and Officers (D&O) insurance policy has played a pivotal role in safeguarding the financial cost associated with the incident.

This policy fully covers substantial expenses for retaining legal counsel to defend the director, covering legal representation costs during regulatory inquiries, and even the expenses related to hiring a public relations expert.

Directors &
Officers Liability Insurance

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Why SMEs and Startups Need a Directors & Officers (D&O) Liability Insurance Policy?

Legal Resources: SMEs and startups lack in-house legal and risk management teams, making it difficult to handle legal issues.

Financial Vulnerability: SMBs and startups, unlike large companies, can suffer severe financial consequences from legal problems.

Promoter’s Personal Risk: Promoter-driven businesses risk personal financial losses due to significant losses in the company.

Talent Attraction: D&O insurance helps attract and retain top talent by offering protection against personal liability.

Risk Mitigation: All companies face lawsuit risks. Without D&O insurance, leaders may personally bear the defense costs.

Investor Attraction: D&O policy signals commitment to risk management, making the company more appealing to investors.

Legal Resources: SMEs and startups lack in-house legal and risk management teams, making it difficult to handle legal issues.

Financial Vulnerability: SMBs and startups, unlike large companies, can suffer severe financial consequences from legal problems.

Promoter’s Personal Risk: Promoter-driven businesses risk personal financial losses due to significant losses in the company.

Talent Attraction: D&O insurance helps attract and retain top talent by offering protection against personal liability.

Risk Mitigation: All companies face lawsuit risks. Without D&O insurance, leaders may personally bear the defense costs.

Investor Attraction: D&O policy signals commitment to risk management, making the company more appealing to investors.

What’s covered?

Legal fees or defence costs
Out-of-court settlements
Investigation costs
Bail bond expenses
Managing public relations
Extradition costs

What’s not covered?

Fraudulent or dishonest acts (e.g., Insider trading)
Bodily Injury and property damage
Claims related to prior incidents or circumstances
Criminal activities (e.g. manslaughter)
Fines and penalties that are uninsurable
Claims arising from the public offering of securities

Legal fees or defence costs
Out-of-court settlements
Investigation costs
Bail bond expenses
Managing public relations
Extradition costs

Fraudulent or dishonest acts (e.g., Insider trading)
Exclusion of Bodily Injury and Property Damage
Claims related to prior incidents or circumstances
Criminal activities (e.g. manslaughter)
Fines and penalties that are uninsurable
Claims arising from the public offering of securities

Claims Roadmap

1. Notify the Insurer

If your company faces litigation, receives a request for monetary or non-monetary relief, or is served a show cause notice or investigation by a regulatory body against its directors or officers, promptly inform the insurer.

2. Expert Review

The insurer will conduct a thorough review of the incident, gathering a detailed chronology of events and examining relevant court documents or received letters.

3. Legal Counsel Engagement

Your company can engage legal counsel for the defence, with the mutual agreement of the insurer. The insurer will then reimburse the legal counsel’s expenses as agreed upon.

This streamlined process ensures a swift and efficient response to protect your company and its leadership in times of need.

1. Notify the Insurer

If your company faces litigation, receives a request for monetary or non-monetary relief, or is served a show cause notice or investigation by a regulatory body against its directors or officers, promptly inform the insurer.

2. Expert Review

The insurer will conduct a thorough review of the incident, gathering a detailed chronology of events and examining relevant court documents or received letters.

3. Legal Counsel Engagement

Your company can engage legal counsel for the defence, with the mutual agreement of the insurer. The insurer will then reimburse the legal counsel’s expenses as agreed upon.

Why Onsurity

Custom Solutions

We create plans that fit your needs.

Personal Touch

We combine digital ease with personalized service.

Great Risk Management

We’re backed by experts who understand D&O risks.