Covid-19 brings insurance policies for directors back into mainstream

An insurance offering that almost became a laggard is getting back into the mainstream, thanks to  Covid-19. Despite the growing frequency and severity of claims, many intermediaries stopped selling the Directors and Officers (D&O) Liability insurance because the product became very commoditised in the recent past, and the servicing demands attached to it were high.

Starting from the Bhopal Gas tragedy of 1984, the Indian insurance industry began to realise the need for domestic expertise in liability classes. Despite a D&O product becoming available by the late 1990s, Satyam Computers was a wake-up call. While overseas shareholders could as a class bring action and seek remedy from Satyam, domestic shareholders were left high and dry.

Ironically, the Companies Act 2013