DIRECTORS AND OFFICERS LIABILITY INSURANCE (D&O)

The D&O policy provides cover for the personal liability of Directors and Officers arising due to wrongful acts in
their managerial capacity. Defence costs are also covered and are payable in advance of final judgment. This
policy provides protection for claims brought against directors, officers and employees for actual or alleged
breach of duty, neglect, misstatements or errors in their managerial capacity.

What is unique about Tata AIG Directors & Officers liability insurance

Having pioneered the Directors and Officers liability insurance, Tata AIG is the most preferred liability insurance
underwriter among corporates in India. Tata AIG's inherent strengths available to the Indian industry include:

Superior claims handling ability

Presence in more than 160 jurisdictions
Local expertise, understanding and support with global backing
Why is a Directors and Officers liability insurance policy required?

Some of the specific exposures that make D&O insurance necessary for the Directors and Officers are:

Vulnerability to shareholder/stakeholder claims

Sexual harassment, discrimination allegations and other employment practice violations
Regulatory investigations
Accounting irregularities
Exposures relating to mergers and acquisitions
Corporate Governance requirements
Compliance with various legal statutes
Evolution of Directors and Officers Liability Insurance

The sources of possible actions against directors are wide and varied. As one of the leading Directors and
Officers (D&O) liability insurers in the world, we know that directors are particularly exposed following merger and
acquisition activity and company liquidations.
Employee actions against directors are another frequent source of claims in areas such as racial discrimination,
sexual harassment and unfair dismissal. Further actions can arise as a result of Regulators' actions under
various statutes, such as the Companies Act 1956, Securities and Exchange Board of India Act 1992, Foreign
Exchange Management Act 1999, etc.
Reports on Corporate Governance like the Kumaramangalam Birla Report 1999, the Narayana Murthy Report
2003 and Clause 49 of the listing agreement with stock exchanges, etc. set out the breadth and scope of board
level responsibilities more clearly than ever before. These statutes set the standards for directorial behaviour and
at the same time increase the potential for actions against directors who fall short of these standards.
Defence costs and damages in such actions can vary from thousands to millions of rupees and the length of time
taken to settle cases can extend from several months to several years.
The regulatory environment facing the directors of today's companies is more rigorous, and their responsibilities
more onerous than at any time in living memory. The next few years will see even tighter legislation and
increasing globalization of business, thus subjecting directors and officers to closer scrutiny from shareholders,
customers, employees, suppliers and regulators not just in the global market place but also in their domestic
environment.

Tata AIG has anticipated this changing environment. We know how important it is to give directors and officers
the best possible protection. We have a history of successful innovation and market leadership in providing
management liability insurance and offer a comprehensive Directors & Officers Liability Insurance solution CorporateGuard.
Who can bring an action against Directors and Officers?

Employees
Suppliers
Competitors
Regulators
Customers
Shareholders
Other stakeholders
Who does the cover apply to?

The cover applies to former, present and future members of the board of directors, the management and any
employee performing a managerial or supervisory role.
Why should Indian companies buy Directors and Officers liability insurance?

Indian companies need to purchase D&O insurance to protect their Directors and Officers from exposures arising
out of compliance with various statutes. Directors have highly demanding legal obligations to uphold. They also
have a fiduciary duty to exercise skill, care and diligence. Further, even independent and nominee directors are
held to be equally accountable to stakeholders.
Also, as Indian companies foray into the global marketplace to sell their products and services or to mobilize
capital, they need to purchase D&O insurance to secure protection from overseas exposures.
For any enquiry, suggestion or clarifications please email us at: liability.insurance@tata-aig.com
D&O Insurance for Small & Medium-Sized Companies

Today's businesses operate in a fast-moving and dynamic environment. Management is closely involved in the
day-to-day business operations and important business decisions have to be made on the spot. Such
entrepreneurial environment can have a dangerous downside as well. Because the management is so closely
involved in daily operations and is often making key decisions, small company owners and managers are
extremely vulnerable to lawsuits from regulators, shareholders, customers, competitors, employees and
government bodies amongst others. A costly lawsuit of this kind can have a particularly severe impact on
individuals since the owner's personal net worth is often tied to the financial health of the company. Keeping this
in view, Tata AIG has designed a pre-underwritten Directors and Officers liability insurance policy called Highlight
which is designed specifically for the needs of unlisted small and medium sized enterprises.

Tata AIG's Highlight D&O policy offers an easy way for small and medium-sized companies to secure protection
for their Directors and Officers from such lawsuits and claims.
Tata AIG experts can help assess the amount of coverage your company needs based on your risk exposure and
offer you comprehensive protection at affordable premiums.
Tata AIG's extensive resources and state-of-the-art customer service makes managing risk simple and costeffective.
Highlight covers claims made on Directors and Officers of a company by stakeholders including:
Shareholders, Regulatory Agencies, Joint Venture Partners, Lenders, Suppliers, Customers, Consultants,
Employees, Trade-Unions.

The Defence costs involved in the claim are also covered under the policy and are payable in advance of final
judgement.
Why do you need Highlight?
To protect a company's Directors and Officers from:

Employment Practice litigations

Regulatory investigations
Customer suits
Accounting irregularities
Other stakeholder claims