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Specialised Cover

Directors & Officers

Personal liability cover for directors and officers facing allegations of wrongful acts in managing the company. Under the Companies Act 2013 a director's duties are personal, and so is the exposure: a claim reaches personal assets, not only the balance sheet. Structured across Side A, B and C so cover holds whether or not the company can indemnify.

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Coverage at a Glance
Side A Personal Cover

Protects individuals when the company cannot indemnify

Company Reimbursement

Side B, where the company does indemnify

Regulatory Investigation

Costs of responding to regulators and inquiries

Wrongful Acts

Breach of duty, misstatement, neglect or error

Side APersonal
Side BCompany
Side CSecurities
Run-offAvailable
Coverage

What directors and officers liability protects

This one protects people rather than the company. A claim against a director is made against them personally, and it reaches their own assets.

Defence costs for individuals
Legal costs of defending a director or officer against an allegation of a wrongful act in that capacity, paid as the defence runs rather than after it concludes.
Damages and settlements
Awards and settlements the individual becomes liable to pay, within the limit of indemnity and subject to the policy's exclusions.
Company reimbursement
Where the company has indemnified its directors, as most articles permit, this section reimburses the company for having done so.
Regulatory and statutory proceedings
Investigations and proceedings brought by regulators and authorities, which under the Companies Act can be directed at officers personally and not only at the company.
Employment practice claims
Allegations of wrongful dismissal, discrimination or harassment brought against individuals, which on most small and mid-size companies is the section that is actually used.
Outside directorship cover
Extends to a person serving on another board at the company's request, which is easy to overlook and is where a director is often least protected.
Advisory approach

Bought by companies that are raising, needed by companies that are not

Most Indian private companies buy this cover for one of two reasons: an investor made it a condition of a funding round, or a bank or joint venture partner asked for it. Those are perfectly good reasons and we place a great deal of it that way.

The reason it is worth having independently of them is that a director's exposure under the Companies Act does not depend on whether anybody asked. Statutory duties attach to the individual, an allegation is defended by the individual, and the cost of defending one falls on the individual before any question of who was right has been settled. For a family-run business where directors are also the shareholders, the practical effect is that the family's own assets are the defence fund.

The limit is the decision that matters and the one most often set by what looked affordable. We size it against the realistic cost of defending a proceeding to a conclusion, and we read the exclusions with you, because on this cover the exclusions do more work than the insuring clause.

FAQ

Common Questions

Directors and officers of the company in their personal capacity, past, present and usually future. The company itself is covered only for reimbursing them, and in some forms for securities claims. It is not a policy that protects the business against its own liabilities.
No. Private companies, family businesses and start-ups all carry the same personal exposure under the Companies Act, and a funded company is frequently required to hold it by its investors. Listing changes the price and the wording, not the need.
No. Deliberate dishonesty, fraud and personal profit obtained illegally are excluded once established, usually by final adjudication. Defence costs are typically advanced until that point and become repayable if the allegation is proved, which is a distinction worth understanding before you need it.
Professional indemnity answers for the advice or service the business provides to its clients. This answers for how the business is directed and managed, and the claim is against the individual rather than the firm. A consultancy usually needs both, for different reasons.
Only back to the retroactive date agreed on the policy, and only where nobody knew of the circumstances when the cover was taken. It is written on a claims-made basis, so continuity of cover matters and a gap between policies can strand a claim that arrives later.
The latest audited financial statements, the shareholding pattern and whether the company is listed or funded, the number of directors and officers to be covered, and the limit of indemnity wanted.