Demonstrate Trust with a Directors & Officers Liability Insurance that secures your Management against Liabilities


Restrict the Risk to Your Key Decisions and Decision-Makers

With an expanding global footprint, Indian companies now have to contend with Stringent and Complex Regulatory Environments both at home and abroad. This has put an additional pressure on companies, in the form of increased shareholder litigations that further challenge the job of Directors and officers of company, often second-guessing their every move. Every action an officer of your company takes may be challenges and could potentially create a situation for claims to be made by persons adversely affected by their actions and decisions.

Entrepreuners, small business owners and managers are also exposed to this risk. Day-to-day business decisions are often taken on the spot by managers, opening them to the risk of a potentially damanging lawsuit.

Directors & Officers (D&O) Management Liability Insurance can help protect directors and officers against the financial burden of litigation, damage to their reputation and loss of personal assets, that could arise from a situation where claims are brought against them for actual or alleged breach of duty, neglect, misbehaviors, misstatements or errors in their managerial capacity.

Naturally, as representatives of your business, it is imperative that they have access to specialised and quality legal representation to safeguard their interests in the most effective way. A Directors & Officers (D&O) Management Liability Insurance will in such cases cover for legal costs and expenses. This is important as litigation involving company directors and officers are often complex and expensive not to mention time consuming.

A significant Risk Management option, the Directors & Officers (D&O) Management Liability Insurance is the solution that provides company directors and officers with the confidence to deal with the challenges of business. With this cover, should they be faced with civil litigation or criminal prosecution, your key personnel can be rest assured that your Insurer can afford them assistance and protection.

Why is Directors & Officers Liability Insurance important?

As per the Newly introduced Company Act 2013, the Director duties are defined as:

  • A director of a company shall act in accordance with the Articles of Association (AOA) of the company.
  • A director of the company shall act in good faith, in order to promote the objects of the company, for the benefits of the company as a whole, and in the best interests of the stakeholders of the company.
  • A director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.
  • A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.
  • A director of a company shall not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.
  • A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.
  • A director of a company shall not assign his office and any assignment so made shall be void.

In addition, the definition of “Officer who is in default” has significantly widened to include Key Managerial Personnel.

Who may claim against Directors & Officers?

Given the stringent expectations from Directors and Managers, their actions and decisions can consequently be questioned by numerous parties such as:


Individual shareholders may bring personal action against an individual company and/or its directors & officers as a result of wrongful act or omission.


Claims may be raised for employment related matters such as unfair dismissal, unlawful discrimination, sexual harassment and mismanagement or unfair administration of superannuation funds.

Regulatory Authorities

Claims can be made during the course of investigation, inquiry or prosecution by regulatory bodies such as the SEBI, Revenue Department etc.


Can raise claims for misrepresentations made in advertising material or deceptive trade practices.


Can question continuing trade whilst the company is insolvent. In addition, creditors may bring civil actions alleging illegal payment of dividends if the company has distributed dividends to shareholders.


Can raise claims related to defamation or misleading advertising that unfairly compares the company’s product to that of the competitors. A competitor whose copyright has been infringed may bring a civil action as well.

Ethika’s Commercial General Liability Policy ensures that you have full liability coverage with comprehensive provisions for:

      • Negligence
      • Wrongful Misrepresentation
      • Breach of Trust
      • Breach of Fiduciary duty or breach of warranty of authority
      • Unlawful default including out of court settlements
      • Defence costs and expenses
      • Compensatory damages awarded against the company directors and officers
      • Libel and Slander
      • Employment Practices Liability
      • Official investigations and enquiries
      • Previous Securities Offering
      • Intellectual Property
      • Blanket subsidiary cover
      • Severability and Non-Imputation Additional notification period
      • Advance payment of defence costs and expenses
      • External Positions
      • Prospectus liability for current and future offerings
      • Entity protection for critical occurrences
      • Pollution
      • Joint Venture Liability
      • Entity Protection for Securities Claims
      • Entity Protection for Employment Related Matters
      • Prior or pending litigation
      • Asbestos related liability
      • Bodily injury claims
      • Liability in consequence of any position held by an Insured Person as an Employee Benefit trustees
      • Professional Services related claims
      • Claims arising out of Securities Offerings
      • War & Terrorism
      • Liability in consequence of any external positions held by any Insured Persons
      • Loss arising out of Property Damage
      • Actions brought by Substantial Shareholders
      • Claims caused by unscrupulous behaviour of Insured Person(s)
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