{"id":452,"date":"2016-12-13T10:08:36","date_gmt":"2016-12-13T10:08:36","guid":{"rendered":"https:\/\/pamstaging.securenow.in\/insuropedia\/?p=452"},"modified":"2026-07-29T10:31:24","modified_gmt":"2026-07-29T10:31:24","slug":"who-are-covered-under-directors-officers-liability-insurance-policy","status":"publish","type":"post","link":"https:\/\/pamstaging2.securenow.in\/insuropedia\/who-are-covered-under-directors-officers-liability-insurance-policy\/","title":{"rendered":"Who are covered under Directors &#038; Officers (D&#038;O) Liability Insurance Policy?"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p>Also, <a href=\"https:\/\/securenow.in\/commercial-liability-insurance\/director-officer-liability-insurance\">Directors&#8217; &amp; Officers&#8217; liability insurance<\/a> safeguards the personal liability of directors and officers. These liabilities may arise if the directors and officers do any wrongful act in their managerial capacity.<\/p>\n<h2 data-path-to-node=\"3\">Key Takeaways<\/h2>\n<ul data-path-to-node=\"4\">\n<li>\n<p id=\"p-rc_0d5e0d988e226900-150\" data-path-to-node=\"4,0,0\"><b data-path-to-node=\"4,0,0\" data-index-in-node=\"0\">Broad Definition of Insured Persons:<\/b> <span class=\"citation-294 citation-end-294\">D&amp;O policies protect a wide spectrum of corporate personnel beyond board members, including company secretaries, risk managers, team leads, in-house counsel, and subsidiary officers.<\/span><\/p>\n<\/li>\n<li>\n<p id=\"p-rc_0d5e0d988e226900-151\" data-path-to-node=\"4,1,0\"><b data-path-to-node=\"4,1,0\" data-index-in-node=\"0\">Coverage Across Temporal Limits:<\/b> <span class=\"citation-293 citation-end-293\">Protection extends to past, present, and future directors and officers, safeguarding individuals against claims filed even after leaving the company.<\/span><\/p>\n<\/li>\n<li>\n<p id=\"p-rc_0d5e0d988e226900-152\" data-path-to-node=\"4,2,0\"><b data-path-to-node=\"4,2,0\" data-index-in-node=\"0\">Inclusion of De-Facto &amp; Committee Directors:<\/b> <span class=\"citation-292 citation-end-292\">Individuals exercising managerial authority without formal titles (de-facto directors) and members of internal audit or compensation committees are explicitly covered.<\/span><\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"4,3,0\"><b data-path-to-node=\"4,3,0\" data-index-in-node=\"0\">Funding Multi-Tiered Legal Appeals:<\/b> As shown in commercial disputes (e.g., confidentiality breach allegations), D&amp;O insurance pays ongoing legal fees across lower and appellate courts to fully clear an executive&#8217;s name.<\/p>\n<\/li>\n<li>\n<p data-path-to-node=\"4,4,0\"><b data-path-to-node=\"4,4,0\" data-index-in-node=\"0\">Prospective IPO &amp; Prospectus Coverage:<\/b> Individuals named as prospective board members in public offering documents receive protection against pre-listing disclosure liabilities.<\/p>\n<\/li>\n<\/ul>\n<h2><strong>Who is covered under a Directors &amp; Officers policy<\/strong><\/h2>\n<p>The policy covers a large number of people in a company, including:<\/p>\n<ul>\n<li>Directors and Officers employed by the organization<\/li>\n<li>Directors and Officers of subsidiary companies<\/li>\n<li>Non-executive or independent directors<\/li>\n<li>Risk managers<\/li>\n<li>Managers or supervisors<\/li>\n<li>An employee acting as a lawyer on behalf of the company for any employment or security claim<\/li>\n<li>Company Secretaries<\/li>\n<li>And other important executives. Generally, most employees handling a team are considered.<\/li>\n<\/ul>\n<h3><strong>Under a D&amp;O policy,\u00a0directors or officers imply:<\/strong><\/h3>\n<ul>\n<li>A past, present, or future director, officer, management committee member, supervisory board member, management board member, or governor of the company duly elected as per the law<\/li>\n<li>A person who is a past, present, or future de facto director or officer of the company<\/li>\n<li>Past, present, or future corporate general counsel (or equivalent position) of the company<\/li>\n<li>Any director or officer, as defined above, who is the past, present, or future member of the company\u2019s internal audit committee, internal compensation committee, or any other internal committee of the company<\/li>\n<li>A prospective director in the listing or prospectus for a public offering issued by the company<\/li>\n<li>Also, Important executives who may not be on the board<\/li>\n<\/ul>\n<h3><strong>Case Study<\/strong><\/h3>\n<p>A marine and transport company inked an agreement with an oil company to provide services to the latter. However, it was later alleged that one of the directors of the <a href=\"https:\/\/securenow.in\/marine-insurance\">marine insurance company<\/a> had breached the confidentiality provisions of the contract. He had shared sensitive information about the oil company with its competitor. Consequently, the oil company revoked the agreement and initiated significant legal action against the director of the marine company. The company alleged a breach of contract. Additionally, it considered the director\u2019s act wrongful due to which the company faced financial loss. However, the director of the marine company denied any wrongdoing. As the company had a\u00a0 <a href=\"https:\/\/securenow.in\/commercial-liability-insurance\/director-officer-liability-insurance\">D&amp;O insurance policy<\/a>, it approached its insurance company for coverage.<\/p>\n<p>Subsequently, the insurer provided the coverage on the basis of the allegation filed against the \u201cinsured person.\u201d Although the court upheld the oil company\u2019s claims at first, it cleared the director of all the allegations when the marine company approached the higher court. Eventually, the D&amp;O insurance company covered all the legal costs incurred by the marine company in defending its director in court. Without this insurance, the director or the company would have had to pay Rs 40 lakhs of legal costs.<\/p>\n<h3 data-path-to-node=\"0\">Summary Table: Scope of Insured Persons and Governance Roles under D&amp;O Policies<\/h3>\n<div class=\"horizontal-scroll-wrapper\">\n<div class=\"table-block-component\">\n<div class=\"table-block has-export-button new-table-style has-scrollbar is-at-scroll-start\">\n<div class=\"table-content md-content\" data-hveid=\"0\" data-ved=\"0CAAQ3ecQahgKEwiU7LGjjvWVAxUAAAAAHQAAAAAQ4wM\">\n<table data-path-to-node=\"1\">\n<thead>\n<tr>\n<td><strong>Beneficiary Category<\/strong><\/td>\n<td><strong>Insured Roles &amp; Designations<\/strong><\/td>\n<td><strong>Triggering Allegations &amp; Legal Scope<\/strong><\/td>\n<td><strong>Policy Protection Mechanism<\/strong><\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span data-path-to-node=\"1,1,0,0\"><b data-path-to-node=\"1,1,0,0\" data-index-in-node=\"0\">Executive &amp; Non-Executive Leadership<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,1,1,0\">Past, present, and future directors, officers, de facto directors, and independent\/non-executive board members.<\/span><\/td>\n<td><span data-path-to-node=\"1,1,2,0\">Allegations of breach of confidentiality, trade secret leakage, or wrongful act in managerial capacity.<\/span><\/td>\n<td><span data-path-to-node=\"1,1,3,0\">Funds multi-tiered appeal processes and court defense expenses across lower and higher courts.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,2,0,0\"><b data-path-to-node=\"1,2,0,0\" data-index-in-node=\"0\">Corporate Governance &amp; Committees<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,2,1,0\">Members of internal audit committees, compensation committees, and risk management committees.<\/span><\/td>\n<td><span data-path-to-node=\"1,2,2,0\">Accounting misstatements, executive pay disputes, or oversight negligence claims.<\/span><\/td>\n<td><span data-path-to-node=\"1,2,3,0\">Shields individual committee members from personal liability stemming from governance decisions.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,3,0,0\"><b data-path-to-node=\"1,3,0,0\" data-index-in-node=\"0\">In-House Legal &amp; Advisory Counsel<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,3,1,0\">Corporate general counsel, company secretaries, and employees acting as legal representatives.<\/span><\/td>\n<td><span data-path-to-node=\"1,3,2,0\">Errors in regulatory filings, employment claim defenses, or security offering filings.<\/span><\/td>\n<td><span data-path-to-node=\"1,3,3,0\">Extends defense cost coverage to key internal advisors handling critical corporate actions.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,4,0,0\"><b data-path-to-node=\"1,4,0,0\" data-index-in-node=\"0\">Subsidiary &amp; Extended Management<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,4,1,0\">Managers, supervisors, team leaders, and directors of subsidiary entities.<\/span><\/td>\n<td><span data-path-to-node=\"1,4,2,0\">Mismanagement claims across subsidiary business units or operational oversight errors.<\/span><\/td>\n<td><span data-path-to-node=\"1,4,3,0\">Provides unified protection across complex corporate holding structures.<\/span><\/td>\n<\/tr>\n<tr>\n<td><span data-path-to-node=\"1,5,0,0\"><b data-path-to-node=\"1,5,0,0\" data-index-in-node=\"0\">Prospective Directors<\/b><\/span><\/td>\n<td><span data-path-to-node=\"1,5,1,0\">Named prospective directors listed in IPO prospectuses or public offerings.<\/span><\/td>\n<td><span data-path-to-node=\"1,5,2,0\">Shareholder claims alleging misleading statements or misrepresentations in offering prospectuses.<\/span><\/td>\n<td><span data-path-to-node=\"1,5,3,0\">Protects incoming board members during capital raising and public listing phases.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h4><strong>Additional Read: <a href=\"https:\/\/securenow.in\/insuropedia\/features-of-a-dno-liability-insurance-policy\/\">What is covered under a directors and officers Liability Insurance Policy?<\/a><\/strong><\/h4>\n<h3><strong>Role of SecureNow<\/strong><\/h3>\n<p>So, to have a smooth settlement of your D&amp;O liability insurance policy, you must choose the right insurer. SecureNow can help you think through the best covers for your D&amp;O and also give a detailed comparison of different insurance companies offering D&amp;O liability insurance coverage.<\/p>\n<h3 data-path-to-node=\"6\">Frequently Asked Questions (FAQs)<\/h3>\n<h4 data-path-to-node=\"7\"><b data-path-to-node=\"7\" data-index-in-node=\"0\">1. Who qualifies as an &#8220;insured person&#8221; under a Directors and Officers (D&amp;O) liability policy?<\/b><\/h4>\n<p id=\"p-rc_0d5e0d988e226900-153\" data-path-to-node=\"8\"><span class=\"citation-291 citation-end-291\"><strong>A)<\/strong> An insured person under a D&amp;O policy includes past, present, and future directors, executive officers, company secretaries, general counsel, risk managers, subsidiary board members, de facto directors, and managerial employees who supervise teams or make operational decisions.<\/span><\/p>\n<h4 data-path-to-node=\"9\"><b data-path-to-node=\"9\" data-index-in-node=\"0\">2. Does a D&amp;O policy cover non-executive and independent directors?<\/b><\/h4>\n<p id=\"p-rc_0d5e0d988e226900-154\" data-path-to-node=\"10\"><strong>A)<\/strong> Yes. <span class=\"citation-290 citation-end-290\">Independent and non-executive directors are covered under D&amp;O policies.<\/span> Because independent directors face personal asset exposure from board oversight decisions without managing daily operations, D&amp;O insurance is often a strict prerequisite for them to accept board appointments.<\/p>\n<h4 data-path-to-node=\"11\"><b data-path-to-node=\"11\" data-index-in-node=\"0\">3. Are internal committee members protected under a company&#8217;s D&amp;O policy?<\/b><\/h4>\n<p id=\"p-rc_0d5e0d988e226900-155\" data-path-to-node=\"12\"><strong>A)<\/strong> Yes. <span class=\"citation-289 citation-end-289\">D&amp;O liability policies cover past, present, and future members of internal corporate governance committees, such as the audit committee, compensation committee, risk management committee, and nomination committee, against claims alleging oversight failure or governance breach.<\/span><\/p>\n<h4 data-path-to-node=\"13\"><b data-path-to-node=\"13\" data-index-in-node=\"0\">4. How does D&amp;O insurance protect executives in commercial confidentiality or contract disputes?<\/b><\/h4>\n<p data-path-to-node=\"14\"><strong>A)<\/strong> If an executive or director is sued by a third party for allegedly breaching confidentiality provisions or causing financial losses, the D&amp;O policy advances legal defense fees, attorney retainers, and court costs. The policy pays for the defense through all judicial levels, including appeals, until a final judgment is rendered.<\/p>\n<h4 data-path-to-node=\"15\"><b data-path-to-node=\"15\" data-index-in-node=\"0\">5. Are prospective directors listed in an IPO prospectus covered by D&amp;O insurance?<\/b><\/h4>\n<p id=\"p-rc_0d5e0d988e226900-156\" data-path-to-node=\"16\"><strong>A)<\/strong> Yes. <span class=\"citation-288 citation-end-288\">Broad D&amp;O policies include prospective directors named in public offering prospectuses or stock listing filings.<\/span> This protects incoming leadership from misrepresentation or disclosure claims brought by investors following a public capital raise.<\/p>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Who qualifies as an \\\"insured person\\\" under a Directors and Officers (D&O) liability policy?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"An insured person under a D&O policy includes past, present, and future directors, executive officers, company secretaries, general counsel, risk managers, subsidiary board members, de facto directors, and managerial employees who supervise teams or make operational decisions.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Does a D&O policy cover non-executive and independent directors?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. Independent and non-executive directors are covered under D&O policies. Because independent directors face personal asset exposure from board oversight decisions without managing daily operations, D&O insurance is often a strict prerequisite for them to accept board appointments.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Are internal committee members protected under a company's D&O policy?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. D&O liability policies cover past, present, and future members of internal corporate governance committees, such as the audit committee, compensation committee, risk management committee, and nomination committee, against claims alleging oversight failure or governance breach.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"How does D&O insurance protect executives in commercial confidentiality or contract disputes?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"If an executive or director is sued by a third party for allegedly breaching confidentiality provisions or causing financial losses, the D&O policy advances legal defense fees, attorney retainers, and court costs. The policy pays for the defense through all judicial levels, including appeals, until a final judgment is rendered.\"\n      }\n    },\n    {\n      \"@type\": \"Question\",\n      \"name\": \"Are prospective directors listed in an IPO prospectus covered by D&O insurance?\",\n      \"acceptedAnswer\": {\n        \"@type\": \"Answer\",\n        \"text\": \"Yes. Broad D&O policies include prospective directors named in public offering prospectuses or stock listing filings. This protects incoming leadership from misrepresentation or disclosure claims brought by investors following a public capital raise.\"\n      }\n    }\n  ]\n}\n<\/script><\/p>\n<h4><b>About The Author<\/b><\/h4>\n<p><strong>Rajesh\u00a0<\/strong><\/p>\n<p><span style=\"font-weight: 400;\">MBA Finance<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With a wealth of expertise in the insurance realm, Rajesh is a distinguished writer specializing in articles focusing on directors and officers insurance for SecureNow. Boasting 9 years of experience in the industry, he profoundly understands the complexities surrounding directors and officers liability coverage. Their articles delve into the intricacies of D&amp;O insurance, providing readers with invaluable insights into risk mitigation strategies and policy considerations. Renowned for their comprehensive knowledge and attention to detail, Rajesh is dedicated to delivering informative and engaging content that empowers individuals and businesses to navigate the complexities of insurance with confidence.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Also, Directors&#8217; &amp; Officers&#8217; liability insurance safeguards the personal liability of directors and officers. These liabilities may arise if the directors and officers do any wrongful act in their managerial capacity. Key Takeaways Broad Definition of Insured Persons: D&amp;O policies protect a wide spectrum of corporate personnel beyond board members, including company secretaries, risk managers, [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_lmt_disableupdate":"no","_lmt_disable":"no","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[309,304],"tags":[558],"class_list":["post-452","post","type-post","status-publish","format-standard","hentry","category-product-features-directors-and-officers-liability-insurance","category-directors-and-officers-liability-insurance","tag-do-insurance"],"acf":[],"modified_by":"SecureNow","_links":{"self":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/comments?post=452"}],"version-history":[{"count":23,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/452\/revisions"}],"predecessor-version":[{"id":36917,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/posts\/452\/revisions\/36917"}],"wp:attachment":[{"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/media?parent=452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/categories?post=452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pamstaging2.securenow.in\/insuropedia\/wp-json\/wp\/v2\/tags?post=452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}