Get to know Directors and Officers Liability Insurance

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Get to know Directors and Officers Liability Insurance

Directors and Officers Liability Insurance is insurance that provides coverage for losses that arise as a result of lawsuits from third parties that are shown against the directors and officers of the company because they are considered to have carried out the 'Wrongful Act' in their capacity as directors and officers of the company.

Third parties in this sense usually come from regulators, competitors, customers, shareholders, special interest groups, and even employees.


Legal basis
The emergence of claims against company directors and officers is based on the laws and regulations that state the obligations of the company's board, namely the Limited Liability Company Law no. 40 of 2007. The law states:

Company Board
The Board of Directors is a Company organ that is authorized and fully responsible for the management of the Company for the benefit of the Company, in accordance with the purposes and objectives of the Company and represents the Company, both inside and outside the court in accordance with the provisions of the articles of association.

Commissioner is a company organ that is in charge of conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors.

Article 69(3)
Joint responsibilities with regard to financial statements.

Article 97(3) and Article 114(3)
Personal responsibility if the Director / Commissioner is guilty or negligent in carrying out his duties.

Article 104(2) and Article 115
In the event that the bankruptcy occurs due to the fault or negligence of the Board and the bankruptcy assets are not sufficient to pay all of the Company's obligations, there is joint and multiple responsibility for all outstanding obligations of the bankruptcy estate.

What is Guaranteed?

Directors and Officers Liability Insurance pays on behalf of the Insured/Company for the following costs:

  • Investigation Fee

  • Corporate Securities Claim

  • Employment Practice Claims Company

Additional Guarantee
The following are additional guarantees in the Directors and Officers Liability Insurance:

  • Investigative Derivative Request Fee
  • Public Relations Costs
  • Report and Investigation Fee
  • Regulatory Issue Fee
  • Mitigation Cost
  • Emergency Fee
  • Prosecution Fee
  • Expenditures Related to Confiscation of Assets

  • Costs Associated with Damage to a Good Name
  • Shareholder Fee
  • Additional Protection for Directors and Non-Executive Directors of the Parent Company
  • Fines and Civil Sanctions
  • Insured Responsibility for Corporate Tax
  • Interpretive Advisory Fee
  • Travel and Accommodation Expenses (related to the investigation)
  • Liberalization in Claims using Foreign Law

 

What's Not Guaranteed?

The following are the General Exceptions contained in the Directors and Officers Liability Insurance Policy:

Behavior

Behavior arising out of, based on, or related to:
obtain an advantage or benefit to which the Insured is not legally entitled; or
commit any criminal, dishonest or fraudulent act,

in cases where either of the two acts above can be proven by a final decision of a court or arbitration or by a formal written acknowledgment by the Insured Person.

Insurance Claims and Past Circumstances

Insurance Claims arising out of, based on or related to:

alleged facts or allegations of Acts of Error similar or related to or contained in any insurance claim which has been or should be reported or in any circumstances where notice has been or should have been given under any policy where this Policy is an extension or replacement or which constitutes continuation of the policy in time; or any pending or pre-existing civil, criminal, constitutional or law enforcement proceedings, examination, arbitration or court where the Insured has submitted a notification on the Continuity Date, or which refers to an allegation or which derives from facts -the same facts or grounds as alleged in these acts.


Body Injury and Property Damage for Body Injury and/or Property Damage
This exception does not apply to:

any insurance claim for mental stress related to a Violation of Labor Practices;
Cost of Defending Body Injury & Damage to Property which is included in the guarantee;

Any Defense Costs arising from a Loss suffered by the Insured Person in connection with a court case for a breach of duty which has caused the death of a person in the workplace.


Professional Service

Professional Services Exception for any errors or omissions in the provision of Professional Services. This exclusion does not apply to derivative Claims brought against an Insured Person alleging a failure to supervise persons performing or failing to perform such Professional Services.

Transaction

Each Transaction arises from, pursuant to or in connection with any Error Acts committed after the effective date of the Transaction, unless such Transaction has been agreed to be abandoned in accordance with the General Policy Provisions.

What You Need to Know About This Product?

DEFINITION OF INSURANCE/THIRD PARTY

The Insured are directors and officers of the company (eg president directors and commissioners), both those who have, are currently, or will be in these positions.
Third parties are regulators, shareholders, stakeholders, competitors, and employees, who suffer losses.

DEFINITION OF WRONG ACT (WRONGFUL ACT)

Mistakes or alleged wrongdoing, negligence of breach of duty and authority, false or misleading statements, defamation, violation of labor practices, and others claimed against the Insured in relation to their capacity as Directors and Officers of the Company.

CONFIDENTIALITY

The Insured will make all reasonable efforts not to disclose any Insurance Coverage to any person, except to professional advisers or as required by law or court order and will only mention in the Company's annual report (if required) that the Company has agreed to, or with other means, to pay premiums for Insurance Coverage, but will not announce the nature of the liability covered by the Insurance Coverage, the name of the Insurer, the Limit of Liability or the premium paid for the Insurance Coverage.


DUTY OF DISCLOSURE

The Insured is obliged to disclose all material facts from things that he knows and should know. Failure to disclose material facts results in the policy guarantee not being valid.


Procedure for Submitting a Claim

The Insured is not permitted to admit or bear, enter into settlement agreements, or agree to a decision, without the prior written consent of the Insurer (which will not be unreasonably delayed or withheld). The Insured must contact the Insurer first, shortly after the event that has the potential to cause loss occurs.

The notice of claim must be accompanied by reasons for anticipating an insurance claim will occur, and fully relevant information with respect to the date, details of the Acts of Error (if applicable) and the potentially related parties as the Insured and the plaintiff.


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Get to know Directors and Officers Liability Insurance

Get to know Directors and Officers Liability Insurance

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Directors and Officers Liability Insurance is insurance that provides coverage for losses that arise as a result of lawsuits from third parties
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Deskripsi

Directors and Officers Liability Insurance is insurance that provides coverage for losses that arise as a result of lawsuits from third parties that are shown against the directors and officers of the company because they are considered to have carried out the 'Wrongful Act' in their capacity as directors and officers of the company.

Third parties in this sense usually come from regulators, competitors, customers, shareholders, special interest groups, and even employees.


Legal basis
The emergence of claims against company directors and officers is based on the laws and regulations that state the obligations of the company's board, namely the Limited Liability Company Law no. 40 of 2007. The law states:

Company Board
The Board of Directors is a Company organ that is authorized and fully responsible for the management of the Company for the benefit of the Company, in accordance with the purposes and objectives of the Company and represents the Company, both inside and outside the court in accordance with the provisions of the articles of association.

Commissioner is a company organ that is in charge of conducting general and/or specific supervision in accordance with the articles of association and providing advice to the Board of Directors.

Article 69(3)
Joint responsibilities with regard to financial statements.

Article 97(3) and Article 114(3)
Personal responsibility if the Director / Commissioner is guilty or negligent in carrying out his duties.

Article 104(2) and Article 115
In the event that the bankruptcy occurs due to the fault or negligence of the Board and the bankruptcy assets are not sufficient to pay all of the Company's obligations, there is joint and multiple responsibility for all outstanding obligations of the bankruptcy estate.

What is Guaranteed?

Directors and Officers Liability Insurance pays on behalf of the Insured/Company for the following costs:

  • Investigation Fee

  • Corporate Securities Claim

  • Employment Practice Claims Company

Additional Guarantee
The following are additional guarantees in the Directors and Officers Liability Insurance:

  • Investigative Derivative Request Fee
  • Public Relations Costs
  • Report and Investigation Fee
  • Regulatory Issue Fee
  • Mitigation Cost
  • Emergency Fee
  • Prosecution Fee
  • Expenditures Related to Confiscation of Assets

  • Costs Associated with Damage to a Good Name
  • Shareholder Fee
  • Additional Protection for Directors and Non-Executive Directors of the Parent Company
  • Fines and Civil Sanctions
  • Insured Responsibility for Corporate Tax
  • Interpretive Advisory Fee
  • Travel and Accommodation Expenses (related to the investigation)
  • Liberalization in Claims using Foreign Law

 

What's Not Guaranteed?

The following are the General Exceptions contained in the Directors and Officers Liability Insurance Policy:

Behavior

Behavior arising out of, based on, or related to:
obtain an advantage or benefit to which the Insured is not legally entitled; or
commit any criminal, dishonest or fraudulent act,

in cases where either of the two acts above can be proven by a final decision of a court or arbitration or by a formal written acknowledgment by the Insured Person.

Insurance Claims and Past Circumstances

Insurance Claims arising out of, based on or related to:

alleged facts or allegations of Acts of Error similar or related to or contained in any insurance claim which has been or should be reported or in any circumstances where notice has been or should have been given under any policy where this Policy is an extension or replacement or which constitutes continuation of the policy in time; or any pending or pre-existing civil, criminal, constitutional or law enforcement proceedings, examination, arbitration or court where the Insured has submitted a notification on the Continuity Date, or which refers to an allegation or which derives from facts -the same facts or grounds as alleged in these acts.


Body Injury and Property Damage for Body Injury and/or Property Damage
This exception does not apply to:

any insurance claim for mental stress related to a Violation of Labor Practices;
Cost of Defending Body Injury & Damage to Property which is included in the guarantee;

Any Defense Costs arising from a Loss suffered by the Insured Person in connection with a court case for a breach of duty which has caused the death of a person in the workplace.


Professional Service

Professional Services Exception for any errors or omissions in the provision of Professional Services. This exclusion does not apply to derivative Claims brought against an Insured Person alleging a failure to supervise persons performing or failing to perform such Professional Services.

Transaction

Each Transaction arises from, pursuant to or in connection with any Error Acts committed after the effective date of the Transaction, unless such Transaction has been agreed to be abandoned in accordance with the General Policy Provisions.

What You Need to Know About This Product?

DEFINITION OF INSURANCE/THIRD PARTY

The Insured are directors and officers of the company (eg president directors and commissioners), both those who have, are currently, or will be in these positions.
Third parties are regulators, shareholders, stakeholders, competitors, and employees, who suffer losses.

DEFINITION OF WRONG ACT (WRONGFUL ACT)

Mistakes or alleged wrongdoing, negligence of breach of duty and authority, false or misleading statements, defamation, violation of labor practices, and others claimed against the Insured in relation to their capacity as Directors and Officers of the Company.

CONFIDENTIALITY

The Insured will make all reasonable efforts not to disclose any Insurance Coverage to any person, except to professional advisers or as required by law or court order and will only mention in the Company's annual report (if required) that the Company has agreed to, or with other means, to pay premiums for Insurance Coverage, but will not announce the nature of the liability covered by the Insurance Coverage, the name of the Insurer, the Limit of Liability or the premium paid for the Insurance Coverage.


DUTY OF DISCLOSURE

The Insured is obliged to disclose all material facts from things that he knows and should know. Failure to disclose material facts results in the policy guarantee not being valid.


Procedure for Submitting a Claim

The Insured is not permitted to admit or bear, enter into settlement agreements, or agree to a decision, without the prior written consent of the Insurer (which will not be unreasonably delayed or withheld). The Insured must contact the Insurer first, shortly after the event that has the potential to cause loss occurs.

The notice of claim must be accompanied by reasons for anticipating an insurance claim will occur, and fully relevant information with respect to the date, details of the Acts of Error (if applicable) and the potentially related parties as the Insured and the plaintiff.
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