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Directors and Officers Liability Insurance as well as Public and Product Liability Insurance are two significant areas of business operations and business insurance today.
Directors and Officers Liability Insurance: Simply stated, the Directors and Officers Liability Insurance policy is for directors and officers working in corporations or other business entities. It is coverage against legal expenses which Director or officers may incur in defending themselves against allegations of wrongful acts committed in their individual capacity. The emphasis is on individual accountability as high ranking officials can be held personally responsible for alleged acts of neglect and omission. The reason for the increasing demand of such coverage is not hard to see. The roles of high company officers and directors have become increasingly demanding and challenging today. Officers have to cope up with heavy responsibilities and strict regulatory requirements. They have to bear the burden of allegations such as breach of duty, misstatements, neglect or managerial errors. Directors and Officers Liability Insurance has become very important for covering their personal liability in case of allegations of wrongful acts they have committed in their individual managerial capacity. The cost of litigation, including defense costs, is covered in this policy and are payable before the final judgment. It is important that legal costs and expenses are adequately covered since corporate litigation is often quite expensive and complex. It is imperative that Directors and high officials have access to quality and specialized legal personnel who can safeguard their interests in the best way.
Instances: Some of the cases where Directors & Officers Liability Insurance becomes necessary include cases relating to sexual harassment or discrimination allegations, regulatory investigations, vulnerability to stakeholder or shareholders claims, accounting irregularities, corporate governance requirements, exposure in merger and acquisition deals, compliance with legal statutes etc.
Public and Product Liability Insurance: Product Liability Insurance is a tool used by businesses to protect themselves against claims by public related to their products. Public may claim that the production or manufacturing process is defective and resulted in a faulty, defective or unsafe product. Public may also claim that the design itself is defective which has resulted in it being rendered unsafe for use. Companies may also have to contend with claims that instructions were not properly labeled or were defective. Public and Products Liability Insurance gives liability coverage to the manufacturer in case of any losses or injuries accruing to a user, buyer or bystander. The premium for such a policy is based upon the volume of sales of product, the type of product or the role of the insured in the production process. Some companies wrongfully think they can pay lower premiums if the under report the volume of sales. However, they should realize that there are significant penalties for underinsuring.
To learn more about Professional Indemnity Insurance Brokers, visit oraclegroup.net.au where you will find everything you need to know about business insurance Perth and much more… Author: Robert K William