Page 174 - Liability Insurance IC74

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of plant. (xiii) transport system (xiv) safety system
(xv) general assessment and (xvi)
recommendations.

Q6. Describe in detail the coverage provided under
Directors and Officers Liability Policy.

Ans. Ref Q10 (b) of May 2007 & Q3 of Nov 2008

These policies, though popular in UK and USA has been
newly introduced in India. Directors and officers of
companies hold positions of trust and they are
responsible to their company, the shareholders, the
employees, and public at large. They may become liable
to pay for damages for wrongful acts such as failure of
supervision of the affairs of the company etc. Apart
from common law responsibilities, the duties of directors
under the Companies Act relate to the prudent
management of the Company. These duties can be
delegated to the members of management .Specific
duties may also be expressed in the Articles of
Association.

Thus, the directors and officers may be liable to :
12. employees , e.g for unfair dismissal
13. shareholders e.g, for imprudent expansions or loans

or investments

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