Directors & Officers (D&O) insurance has often been described as the most important insurance coverage a risk manager buys – it is the protection the board and senior management will turn to if and when things go wrong.
D&O insurance is not new to Asia. The coverage has been sold here for many years and it generally mirrors the coverage offered elsewhere in the world. Likewise, corporate governance is not a new concept in Asia either. However, corporate governance continues to evolve with various jurisdictions continuing to update their Companies Acts, strengthening the protections for minority shareholders and pressuring management to be more transparent.
There is no shortage of claims and circumstance activity in Asia. In general, the claims, while still significant, tend to be manageable and have not yet been large or frequent enough to drive any sort of hardening in the marketplace. The market for D&O insurance has been able to remain competitive due to the steady introduction of new capacity more than off-setting the loss of capacity due to mergers.
Often times, D&O insurance is wrongly treated as a commodity. The failure to pay attention to the finer points of coverage can result in claims not getting paid. The coverage offering in the market vary from insurer to insurer – insureds who focus solely on the simple factors such as premium and retention may find themselves fighting for coverage when claims happen.
With this guide to D&O insurance, we highlight the importance of D&O insurance for companies large or small. Our guide outlines what D&O insurance is, how it can be used and how it can cover potential legal costs if an action commences.
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