Write short notes on the following: Directors and officers liability insurance policy.

The Directors and Officers Liability Insurance policy is designed to protect the personal properties of directors and officers of a company against the consequences of their personal liability for financial losses arising out of wrongful act and or omissions done or wrongfully attempted in their capacity as directors for officers. Wrongful act is defined as any actual or alleged error, omission, misstatement, misleading statement, neglect, breach of duty or negligent act by any of the Directors or officers, solely in their capacity as Directors or officers of the company. The liability coverage comprises of two sections (a) damages awarded against directors and officers including legal cost (b) reimbursement to the company if the claim on director is paid by the company as per the Articles of Association. According to Section 197(13) of the Companies Act, 2013, where any insurance is taken by a company on behalf of its Managing Director, Whole-time Director, Manager, Chief Executive Officer, Chief Financial Officer or Company Secretary for indemnifying any of them against any liability in respect of any negligence, default, misfeasance, breach of duty or breach of trust for which they may be guilty in relation to the company, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. However, if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration. Criminal behaviour, libel, slander, defamation, fraudulent act, professional inability, environmental damage or pollution, bodily injury or property damage fines penalties and other penal liability are excluded in the policy.