As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mandatory for the Listed Companies to undertake Directors and Officers Insurance for its Independent Directors. You are the Compa

Directors and Officers Liability Policy This is a specialized insurance policy introduced to cover the liabilities of Directors or Officers of a Company. Since they hold positions of trust and responsibility, they may become liable to pay damages, due to acts of omission or commission. It is a type of liability insurance which covers the directors and officers against the claims made by Employees, Suppliers, Competitors, Regulators, Customers, Shareholders, and other stakeholders, for wrongful acts committed by them in the supervision and management of the affairs of the Company. The Listing Agreement, on one hand, outlines the obligations of a publicly listed company to its stakeholders and the stock exchange. It also mandates to have a liability policy that can help mitigate the financial risks associated with fulfilling the obligations outlined in the Listing Agreement. It typically covers defence costs, settlements, and judgments in lawsuits brought by shareholders, regulators, employees, and other parties. It is crucial for attracting and retaining qualified individuals to serve as directors and officers, as it shields them from personal financial ruin in the event of legal action. The policy covers legal defence costs, settlements, and damages resulting from claims by shareholders, employees, regulators, customers, or other stakeholders. It is especially important in the present corporate environment due to increased regulatory scrutiny, shareholder activism, and governance requirements. While the policy does not cover fraud or wilful misconduct, it plays a vital role in risk management and corporate governance, helping companies attract competent professionals and protect leadership from personal liability.