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Get Optimal D&O terms in UAE
Directors’ and officers’ insurance, also known as D&O insurance, is a type of liability insurance that protects the directors and officers of a company from legal action taken against them due to their actions or decisions as leaders of the organization.
This type of insurance is particularly important in the United Arab Emirates (UAE) as the country's business environment can be complex and litigious. With the start-up ecosystem picking up pace and investments coming in, having a D&O policy becomes mandatory.
D&O Insurance covers defence costs incurred by board members, managing directors and employees against claims by shareholders or third parties for alleged misconduct. D&O insurance also covers monetary damages, settlements and arbitration awards resulting from instances.
If the company cannot indemnify its directors, officers or employees for amounts arising from these claims, D&O Insurance pays these costs and protects the individual's private property. However, if a company incurs them then its D&O insurance will reimburse such expenses. The D&O policy also provides some protection for the company itself if the company is sued.
Directors and officers of any organization of all sizes including but not limited to start-ups, non-profit or for-profit, should consider purchasing D&O insurance. This includes corporate officers and board members, as well as executives, managers, and supervisors.
Moreover, companies in the UAE in the following areas should also consider placing a D&O policy
Apart from the standard forms of indemnifications provided by a D&O policy, companies are also often required to place D&O insurance due to the following scenarios
D&O insurance typically offers coverage for:
At Policybazaar UAE, we take pride in our world-class risk assessment capabilities, enabling us to craft and execute cost-effective risk management strategies through insurance. We are here to provide you with the peace of mind you need to safeguard your business and achieve your future objectives.
Ans: Directors’ and Officers’ (D&O) Liability Insurance covers individuals from personal losses in case they are sued due to their service as a director/officer of any business or organisation. These plans also generally cover the costs related to defence or legal fees in case one is sued for any damages or settlements.
While the inclusions of D&O Insurance vary as per your provider and the plan, you can expect the following covers -
Ans: There are many scenarios that can lead to a claim against a company's director and officers. The list can include their performance, which may bring legal issues with respect to mismanagement, and more. Some other instances where claims are usually made include -
Ans: Similar to inclusions or covers, the exclusions of Directors’ and Officers’ Liability Insurance plans depend on which plan and provider you have gone with. With that said, D&O insurance generally does not provide any coverage in numerous scenarios - this may include breach of contract, punitive damages, fraud, unlawful behaviour, intentional involvement in illegal activities, and more.
Ans: The costs for Directors’ and Officers' Liability Insurance plans vary as per several factors such as the coverage sought, the associated risks, and so forth. For instance, you wouldn't need higher coverage if your directors and officers don't have many significant risk exposures. In this case, you can expect the policy to be reasonably priced. However, if the exposure to legal risks is high, you would be required to go with a plan with higher coverage, which would be considerably costlier.
Ans: The ideal requirements for a Directors’ and Officers’ Insurance plan would depend on the business. Each firm has particular requirements, risks, financial constraints, and more. For this reason, the initial step should always be to narrow down the focus to your particular case rather than consider the insurance plan. After determining your needs and risks, you can compare D&O policies from various insurers and even customise your policy at the time of purchase.
Ans: Yes, the former directors of an organisation are also usually covered under D&O Insurance. As a result, in case any claims are made regarding their conduct while serving their tenure as directors, they would remain financially protected in such instances.
Ans: Yes, negligence is generally covered by D&O Insurance. This type of insurance will cover any claims against the directors and officers related to any failure in duties due to the issue of negligence.