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What is Directors’ and Officers’ (D&O) Liability Insurance?

What will a Directors' & Officers' Liability Insurance policy Cover?

When you get a Directors' & Officers' Liability Insurance, your business will be protected in case of....

Legal Representation Costs

Your business will be protected in case of legal liability for payment of defense costs, legal fees and expenses, if an employee/client/third-part files a case against you.

Retired Directors and Officers

In case claims are made against former or retired directors and officers of your company, arising during their tenure, we’ll help cover the costs.

Public Relations Expenses

In case you need the help of a public relations consultant to prevent the effects of negative publicity, we’ll help with the cost of that too.

Emergency Costs Advancement

In case you incur claim expenses or representation costs before receiving written consent from us, we’ll give you give retrospective approval for these amounts.

Employment Practice Liability (EPL)

Covers you in case of defense costs and damages arising from employment-related claims such as allegations of wrongful termination, discrimination, and workplace harassment. This coverage is also sometimes called Employment Practice Liability (EPL).

Abduction Response Cost

In the unfortunate case that an insured individual is the victim of kidnapping, we will take care of the costs incurred by this situation.

Counselling Services

This covers the cost of fees and expenses to a psychiatrist, psychologist or counsellor for the insured individuals to treat stress, anxiety or such similar medical conditions due to a claim or inquiry compelling attendance.

Shareholder Claims Expenses

We will cover you and your company in case you are required to pay any fees, costs, charges and legal expenses to a shareholder of the company who is pursuing a claim against you.

Management Buyouts

In case a subsidiary is no longer a part of your company, we will continue the existing coverage from the date of the buy-out until the expiry of the policy.

Pollution Claims Expenses

This covers any legal and defense costs that may be incurred while defending a claim of any actual or alleged discharge, dispersal, or leaks of pollutants.

New Subsidiaries

If your company acquires or creates a new Subsidiary then they will also be covered under this policy starting from the date of acquisition or creation, subject to certain terms and conditions.

What’s not Covered?

Since we at Digit believe in transparency, here are some cases where you won’t be covered.

Any criminal, fraudulent, dishonest or malicious acts and resulting fines and penalties.

Deliberate acts of violating a contract, law or regulation.

Known wrongful acts that existed prior to policy inception.

Losses due to war, terrorism and nuclear perils.

Any infringement or misappropriation of patents or trade secrets.

Employer's Liability in case of bodily injury or disablement to an employee as a result of performing their jobs.

Employer's Liability in case of bodily injury or disablement to an employee as a result of performing their jobs.

Fines, penalties, and claims for seepage or pollution as well as costs for clean-up, containment, etc.

What Factors Impact the Premium of a Directors' & Officers' Liability Insurance policy?

Which Businesses need a Directors' & Officers' Liability Insurance?

A D&O Liability insurance policy can be used if you feel that your business needs protection from internal or external claims against managers, directors and officers. The policy comes in handy against potentially large liability claims. Listed below are the kind of companies which can avail themselves of Directors’ & Officers’ insurance policy:


Any kind of start-ups be it - IT companies or consulting firms can get themselves the policy.

Small and medium-sized businesses

Companies which have a total of 500 employees can also avail themselves of a D&O insurance policy.

Large businesses

The insurance policy can also be bought by companies that have over 1000 employees on their payroll.

How to choose the right Directors' & Officers' Liability Insurance?


Making sure that the policy has complete coverage needs to be made sure when looking for a Directors' & Officers' insurance policy. You need to look at things like defense costs, settlements, judgments, etc.

Limit of liability

It is better to opt for a policy that lets you customize the limit of liability. Customization will enable you to select the correct amount based on the nature and size of the business.

Claims settlement process

When choosing the right policy, look at the claim settlement process of the insurer. Having a hassle-free claim settlement policy will ensure that your claims are settled with ease.

Compare different policies

Another thing which needs to be done is to compare different policies offered by other insurance companies. It will help you to get yourself the policy which offers you proper coverage along with maximum benefits.

Additional benefits

While most insurers offer you coverage for any eventuality, look for an insurer which offers additional benefits. It can be in any way like round-the-clock customer assistance, easy-to-use mobile apps, etc.

Common Directors' & Officers' (D&O) Liability Insurance Terms Simplified for You

FAQs about D&O Insurance Liability Policy in India