Directors and Officers (D&O) Liability Insurance

Side A: Protects the Individual directly when the company cannot (or is not legally allowed to) pay for their defense.Side B: Reimburses the Company after it has paid to protect its directors.Side C (Entity Cover): Protects the Company itself if it is named in a securities-related lawsuit (common for listed companies).

D&O insurance in India follows the “Innocent until proven guilty” rule. It will pay for your legal defense costs while the trial is ongoing. However, if a court finalizes a judgment that you committed intentional fraud or a criminal act, the insurer will stop paying and may even ask you to refund the defense costs already paid.

Yes. Most modern Indian policies include a “Dedicated Limit for Independent Directors.” This ensures that even if the main policy limit is exhausted by the company’s executive team, a separate “pot of money” remains to protect the non-executive directors.

Yes, usually as an extension. In India, this is critical for cases where a senior manager or HR head is personally sued for wrongful termination, sexual harassment, or discrimination.

A “Retired Directors” or “Run-off” extension provides coverage for several years (often up to 7 years) after a director leaves the company, provided the claim is related to actions they took while they were still in office.

Yes. The policy covers “Inquiry Representation Costs.” If a regulator summons a director for an investigation or an official inquiry into the company’s affairs, the policy pays for the legal preparation and representation.

in India, statutory fines (like those from the Income Tax Dept or NCLT) are generally not Inurable by law. However, the legal costs to contest those fines are covered.

VCs often have their nominees on your board. They want to ensure that if the startup faces a lawsuit or regulatory heat, their nominees are protected and the company’s capital isn’t drained by legal fees.