Tata AIG General launches D&O cover for unlisted companies

New Delhi: Tata AIG General Insurance Company Limited (Tata AIG General) today introduced a liability insurance cover for directors and officers of unlisted small and mid-sized businesses.

Called Highlight, the business risk liability protection product is aimed at directors of small and medium companies and family-owned concerns, which form India's large emerging SME sector, which often lack specialised managerial infrastructure (in house legal, risk managers or compliance managers) and few formal control processes.

On the other hand the risks faced by directors and officers of such companies are similar to their counterparts of listed — regulatory investigations, employment practice litigation including sexual harassment issues, stakeholder claims and accounting irregularities.

Directors and officers can be sued personally by any stakeholder for a decision taken by them on behalf of the company in their professional capacity as directors or officers of the company.

According to Dalip Verma, managing director, Tata AIG General, "Our experience of the D&O market is that the current policies, which are usually bought to cover global exposures have complicated wordings to ensure a tie-in with the rest of the worldwide programme. Highlight is a genuine attempt to demystify the D&O policy so that the target customer understands and appreciates it better."

Verma says that Highlight gives even the casual reader an insight into the complex world of corporate governance as it uses simple language to address the fears and concerns of the small businessman.