What
Is Directors' and Officers' Liability Insurance?
D & O insurance quite simply
is designed to protect Directors and Officers against personal liability
that they may incur in respect of amounts which they are liable
for, in respect of claims made against them arising out of the performance
of their duties.
Therefore a simple definition would
be:
"Protect Directors and Officers
from Loss resulting from Claims made against them in the discharge
of their Duties on behalf of the Company"
Example of the types of personal
liabilities are:-
- Civil Damages or Settlements
- Financial Losses suffered by third
parties
- Defence Costs
What Does
A D & O Policy Cover?
Quite simply a D & O policy covers
"Directors and Officers (insured persons)" for "claims"
made against them alleging a "wrongful act" first made
and notified during the policy period .i.e. This is a claims made
policy.
A Claim is essentially....
Any notice received by an insured,
alleging a Wrongful Act. A notice can be any writ, summons, letter
or any other advice.
The real guts of the Policy is the
"definition of Wrongful Act". It is "Any actual or
alleged act, error, omission, misstatement or misrepresentation
by an Insured(s) whilst acting in their capacity as Directors or
Officers of the Company."
This is a very broad definition and
is really only limited by the policy exclusions or conditions.
Why Buy D &
O Insurance?
- To protect personal assets
- Provides peace of mind to Directors
and enables them to defend their good name and professional standing
- Provides financial protection
to the Company where reimbursement is a factor
- It may be available when corporate
indemnification is refused or legally prohibited, or where corporate
insolvency is an issue
- Insurance can offer broader cover
than indemnification
- Insurance gives Directors and
Officers to take commercially justifiable risks
PRODUCT LIABILITY
This policy protect the exporters
and manufacturers against any loss, damage or injury caused by a
particular product.
Today, in world markets everywhere,
consumers are becoming more aware of their rights and are quicker
to exercise those rights by filing product liability suits against
exporters and manufacturers.
One claim could lead to severe financial
strain on business - and might even lead to financial ruin.
What does
the policy pay for?
The policy provides cover for
- Legal expenses
- Any investigative work necessary
to verify the cause of injury / damage
- Any damages awarded by court
Three areas
of Liability
1. NEGLIGENCE
Failure on your part
to exercise reasonable care in the manufacture of a product.
2. BREACH OF WARRANTY
When a product is sold,
there is an implied warranty that the product is fit and suitable
for the purpose for which it was manufactured. If the product
does not meet this standard, the manufacturer is in breach of
warranty.
3. STRICT LIABILITY
Which assumes that the
manufacturer, distributor or others are at fault and the onus
to prove otherwise lies on them.
Why buy Product Liability Insurance?
- Provides financial protection
to the Company
- There are major international
companies who will only do business if there is cover against
this type of liability.
Enquiries
If you have any enquiries, you may
reach us at 03-26914244.
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