Directors & Officers liability

A Directors and Officers liability policy is a cover for the personal liability arising due to claims brought against Directors, Officers and Employees for actual or alleged misstatements, neglect, errors or breach of duty in their managerial capacity.

Directors & Officers, being human, may commit an unintentional errors or omissions during their course of work/decision making and thus bring about a situation where your company or they in their capacity as Directors/Officers are sued.

Directors & Officers Liability Insurance is also called a D&O policy or a D&O liability insurance.

Some of the specific exposures that make D&O insurance necessary for the Directors and Officers are:

  • Vulnerability to shareholder/stakeholder claims
  • Sexual harassment, discrimination allegations and other employment practice violations
  • Regulatory investigations
  • Accounting irregularities
  • Exposures relating to mergers and acquisitions
  • Corporate Governance requirements
  • Compliance with various legal statutes

D&O for start-ups and all SMEs

Today's small businesses & start-ups operate in a fast-moving and dynamic environment. In smaller firms and start-ups, management is closely involved in the day-to-day business operations and important business decisions must be made on the spot.

Such involvement can have a dangerous downside as well; being so closely involved in daily operations and is often making key decisions, makes small company owners and managers extremely vulnerable to lawsuits from regulators, shareholders, customers, competitors, employees and government bodies amongst others.

A costly lawsuit of this kind can have a particularly severe impact on individuals since the owner's personal net worth is often tied to the financial health of the company.

Features & Benefits

A D&O policy applies to members of the board of directors, the management and employee performing a supervisory or managerial role in a company. D&O liability insures them against personal liability and defense costs incurred from claims alleging wrongful acts in the line of their duties for the company.

The defense costs are also covered under a Directors and Officers Liability Insurance policy and are payable in advance of the final judgment.

Key Features

  • Advancement of Defence costs
  • Employment Practice Liability (EPL) cover for directors and officers
  • Cover for failure / negligence to supervise against any Professional Indemnity related claims
  • Cover for Regulatory Crisis Response
  • Cover for Assets and Liberty Costs including prosecution, bail bond and civil bond expenses
  • Cover for damage to reputation
  • Bilateral Discovery Period
  • Emergency Costs cover
  • Kidnap response cover
  • Special excess protection for non-executive directors
  • Cover for pollution related claims for defence costs and shareholder claims
  • Insured vs Insured (defence cost cover)
  • Severability: non-guilty insured is covered

Addons and extensions

A Directors & Officers Liability Policy can be extended to include the following by paying an extra premium based on risk exposure. If you have requests for additional extensions or a tailor-made benefit, Perilwise will find one for you.

Inquiry Representation Costs

This extension to a D&O policy will cover the costs incurred in preparing for and appearing for an Inquiry, which may be an official investigation, administrative or regulatory proceeding or examination into the affairs of the Company.

These costs will however, not include salaries, travel, wages and accommodation expenses of the insured person.

Spouses and Executors

This extends the Policy’s coverage to the lawful spouse, executors, heirs, administrators or legal representatives of the insured; only in case of a claim made from a wrongful act of the insured individual.

Outside Directorship

This extension allows the insured to remain covered even as he is acting in capacity of a director or officer of an Outside Entity, provided it is at the specific request (with a written approval) of the company.

Former Directors and Officers

The policy, under this extension, can cover the former directors & officers of a company.

Pollution Defence Costs

This extension will cover the defense costs, which you may incur defending a claim correlated to the actual or alleged dispersal, discharge, escape or release of any pollutants.

Shareholder Pollution Claims

This extension will cover the loss experienced due to payable legal liabilities that occur because of a claim made, either directly or indirectly, by any shareholder of the company.

The “claim” in this case being an allegation of loss due to any actual or alleged dispersal, discharge, escape or release of any pollutants.

New Subsidiaries

This covers any company which might have become a subsidiary during the Policy tenure, subject to certain terms and conditions mentioned in detail under the Policy wordings.

Extended Policy Period

The insured, under this policy extension, can request for a policy period extension in case a change in control occurs during the initial tenure of the policy.

Most cover extensions have a sub-limit which forms a part of the Limit of Indemnity. Plus, this list states only a few major extensions; your perilwise representative will aid you in choosing the correct list of policy extensions


  • Libel or Slander and damage to property
  • Infringement of copyright or patents
  • Injury from products manufactured Sold or Supplied by the Company
  • Director versus Director
  • Dishonesty fraud or malicious acts of the Director
  • Anything brought about consequent to actions prior to inception of policy
  • Taxes Fines Penalties or Punitive or Exemplary damages or any claim deemed uninsurable under Law
  • Liability in respect of personal guarantees or warranties
  • Liability in respect of seepage pollution
  • Consequential Loss
  • Radio Activity from any Nuclear/War Like Perils
  • Any claim brought about or contributed consequent upon any profit or advantage or any remuneration to which they are not legally entitled

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