Description

Provision of a range of corporate and administrative services to a selection of investment funds, including hedge funds, funds of funds, real estate and private equity investments to enhance asset protection and estate planning in the most tax efficient way. Besides maximizing returns for high network individuals

What is D&O Insurance?

Responsibilities of Company Directors and Top Executives go beyond the management and operational facets of an organization. The onus is also on them to ensure that the organization acts and conducts its business legally and responsibly.

With the growing list of complex laws and regulation today, as well as the rising awareness of individual rights, the possibilities of loss and consequent litigation increases. This gives more pressure to the need of corporate governance and for a company’s Directors and Officers to perform their duties meticulously. Litigation costs arising from allegations of wrongful acts can be substantial and will have a major financial impact on the individuals and/or the organization if indemnification is provided to the individuals.

Many organizations have looked into providing Directors and Officers Insurance to protect its Directors and Officers from the risk of managing liability arising from possible lawsuits against them. The Insurance coverage is sometimes offered as a benefit in organizations as a way to attract or retain top-level talents.

Directors and Officers Insurance is often known in its abbreviated form “D&O Insurance” by market practitioners. D&O Insurance has been in the Malaysian market for more than a decade. Despite gaining popularity in recent years, the fundamentals and conceptual understanding about D&O Insurance is still in its infancy.

TO BEGIN WITH, Directors and Officers Insurance provides financial protection to the individuals from any legal proceedings or investigation against him/her while acting in his/her capacity as a Director or Officer of the Company or any other position with management and supervisory duty in the company.


Who is Covered?

It is worth noting that D&O Insurance is on an unnamed basis and coverage is afforded to any past, present and future Directors and Officers including employees with managerial and supervisory capacity. This is often referred to as the “Insured” under the policy definition. Coverage is also afforded to company representatives appointed to the associate company as a Director or Officer.

What is Covered?

A typical D&O Insurance policy provides coverage to the “Insured” against lawsuits brought against them due to an alleged “Wrongful Act”. The definition of “Wrongful Act” includes actual or alleged, breach of trust, error, omission, misstatement, misleading statement, defamation, neglect or breach of duty or any other matter claimed against the “Insured”.

With the prior written consent from the Insurer, payment of the insurance benefit will usually be advanced in the form of defence costs in defending the lawsuits against an “Insured” during the litigation. Damages awarded, judgment entered, settlement reached will be covered by the policy at a later stage.