DIRECTORS & OFFICERS LIABILITY
EMPLOYERS PRACTICES LIABILITY INSURANCE
COMMERCIAL GENERAL LIABILITY
PRODUCT LIABILITY AND PRODUCT RECALL
PRODUCT RECALL INSURANCE
ERRORS AND OMISSIONS
PROFESSIONAL INDEMNITY INSURANCE
CYBER RISK INSURANCE
COMMERCIAL CRIME INSURANCE
KIDNAP/RANSOM AND EXTORTION
PUBLIC OFFERING OF SECURITIES INSURANCE
CLINICAL TRIALS
CARRIERS LEGAL LIABILITY
WORKMEN COMPENSATION
TITLE INSURANCE
INHERENT DEFECT INSURANCE
Directors’ and Officers’ Liability insurance provides cover for
1. Personal liability arising out of a wrongful act
2. The entity for reimbursement of those Directors and Officers
3. The entity for liability arising out of securities related lawsuits
Policies are underwritten on a worldwide jurisdiction basis to clients domiciled around the world.
We advise organizations in diverse industry segments and offer tailored solutions to suit individual clients’ needs.
NEED FOR D&O
As a member of the board or an executive officer of a company, you may be personally held liable for any actual or alleged breach of duty, trust, breach warranty, authority, neglect, errors, misstatement, or omissions by anyone in company and can be sued for transactions alleging in financial losses. Exposure varies from shareholders, creditors, business partners, competitors, regulators and employees.
COVERAGE
The policy reimburses the company to the extent it has been insured with respect of such claims, under its Articles of Association or any other contract that effects its Directors and Officers.
  • An outside or non-executive or independent director in a company is also covered.
  • The policy can additionally be endorsed to cover the directors and officers of its subsidiaries, including those acquired or created during the policy period.
  • Specific coverage can be afforded to directorships held in outside boards/ nominee directorships held at the request of the company.
  • Defence costs shall be payable under alleged criminal cases, if the directors and officers are finally acquitted of the wrongful act.
  • The wrongful act is that are discovered after the director leaves the company.
  • Incase of a director’s death, the insurer will defend the director and prevent spillover liabilities from affecting their heirs, estates and legal representatives.
Employee practices liability insurance is of utmost importance for any business. This type of policy provides coverage to a business in relation to its employees in relation to age, sex, harassment, disability, breach of contract, wrongful termination or race.
Large businesses often have multiple EPLI policies to equip them in handling lawsuits filed against their favour. EPLI helps a business in decreasing its chances of being targeted in a lawsuit. Unfortunately, small businesses overlook the importance such policies.
Insurance providers during any proposal, thoroughly review a company’s employment practice and makes sure necessary amendments are implemented prior to the contract.
EPLI provides protection against many kinds of employee lawsuits, including coverage of claims arising from:
  • Sexual harassment
  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Negligent evaluation
  • Failure to employ or promote
  • Wrongful discipline
  • Deprivation of career opportunity
  • Wrongful infliction of emotional distress
  • Mis-management of employee benefit plans
This policy protects your business from financial losses, includes legal costs and compensations arising from property damage or bodily injury caused to any third party due to –
  • The services rendered
  • In-course of business operations
  • Negligence of any employee
  • Includes, non-professional neligent acts: Up to the precribed limits fore-mentioned by the policy
Claims may arise
  • While visiting your business, a customer trips on loose flooring and is injured.
  • An employee in your painting or construction business accidentally leaves water running, causing substantial damage to a customer’s home.
  • A class action lawsuit is filed against your business, alleging advertisements constituted misleading information.
Standard CGL includes :
Coverage A: Bodily injury and property damage
This cover provides protection against losses from the legal liability for bodily injury or property damage to others arising out of non-professional negligent acts or for liability arising out of their premises or business operations. Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.
Coverage B: Personal and advertising injury
Personal and advertising injury protects an insured against liability arising out of offences, such as:
  • Libel
  • Slander
  • False arrest
  • Infringing on another’s copyright
  • Malicious prosecution
  • Use of another’s advertising idea
  • Wrongful eviction, entry or invasion of privacy
Coverage C: Medical Payments
Medical payments includes limited coverage for injuries sustained by a non-employee caused due to an accident that takes place on the insured’s premises or when exposed to the insured’s business operations. CGL pays for all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing and funeral expenses for a person injured or killed in an accident taking place at the insured’s premises or arising from business operations.
Claims Made V/s Occurrence Based policy
" A ‘Claims Made Policy’ is where the claim would occur and has to be lodged within the policy period. This is usually given in conventional CGL policy & would only become relevant when the policy is not renewed subsequently. "
" Occurrence Based Policy is relevant to CGL Policy where the claims, which have taken place during the currency of the policy, can be lodged even after the expiry of the policy period, even if the policy is not renewed "
Product Recall insurance covers expenses associated with recalling a product from the market that would be responsible for possible bodily injury or property damage from its continued use or existence. Standard product liability insurance does not cover this exposure. This cover is typically purchased by manufacturers such as food and beverage, toy and electronics, automobiles and automobile components, aviation parts etc. to cover costs such as customer notification, shipping costs and disposal costs.
Scope of Cover
  • Recall expenses, such as disposal, replacement, advertising and transport
  • Pre-recall expenses
  • Third party recall expenses
  • Government recalls
  • Business interruption
  • Loss of gross profits/revenue
  • Accidental contamination
  • Product rehabilitation
  • Increased cost of working after a recall
  • Extortion demands related to malicious tampering
  • Terrorism cover
  • Terrorism cover
  • Consultancy costs
Product Recall insurance covers expenses associated with recalling a product from the market that would be responsible for possible bodily injury or property damage from its continued use or existence. Standard product liability insurance does not cover this exposure. This cover is typically purchased by manufacturers such as food and beverage, toy and electronics, automobiles and automobile components, aviation parts etc. to cover costs such as customer notification, shipping costs and disposal costs.
Scope of Cover
  • Recall expenses, such as disposal, replacement, advertising and transport
  • Pre-recall expenses
  • Third party recall expenses
  • Government recalls
  • Business interruption
  • Loss of gross profits/revenue
  • Accidental contamination
  • Product rehabilitation
  • Increased cost of working after a recall
  • Extortion demands related to malicious tampering
  • Terrorism cover
  • Terrorism cover
  • Consultancy costs
Technology companies face unique risks and require specific insurance coverages to protect their business from financial loss. Technology professional indemnity insurance is a key element of risk management for a technology company in today’s world.
E&O insurance covers your legal liability arising from professional services in the event of a third party claim stemming from professional negligence. Professionals may owe a duty of care to anybody who might reasonably rely upon the service or advice they have provided. In today’s commercial world, clients expect high standards of service and are more inclined to resort to litigation when such standards have not been met.
Typical reasons that professional indemnity claims are made against a technology company include:
  • Programming error
  • Poor customer communication
  • Problems with large integration/installation projects
  • Development problems
  • Problems with combining or integrating software or hardware components
  • Customer changing project scope (often referred to as “project creep”)
  • Turnover of key personnel
  • Short cuts during testing
  • Poor accounts receivable controls that require the tech company to sue their customer for fees owed and this results in a countersuit for negligence in the performance of the tech services/products
  • Shortfall in externally furnished products or externally performed tasks
Scope of Cover:
  • The Policy: provides indemnity for losses arising from civil liability (including liability for claimant’s costs and expenses incurred) arising in connection with your professional services including:
    • Breach of professional duty
    • Infringement of copyright or intellectual property rights
    • Breach of confidentiality
    • Defamation – and other types of civil liability.
  • Insured Person: cover extends to include you, partners (or members of limited liability partnerships), directors, employees and their personal representatives in the event of death, incapacity, insolvency or bankruptcy.
  • Fraud and Dishonesty Cover: liability of your business to any third party resulting from fraudulent or dishonest conduct.
  • Lost Documents Cover: costs of replacing or restoring documents lost or damaged ‘in transit’ or in your custody.
  • Specialist Consultants Cover: claims resulting from any wrongful act of your specialist consultants, designers or subcontractors engaged in the performance of your professional services.
It covers the cost of mistakes made when providing professional services.
In today’s busy business world, anyone is at risk of making a mistake no matter how professional or diligent they may be. Some mistakes are minor with little or no financial cost or consequence, but others can be far more serious and not having adequate insurance cover can financially destroy a company, its directors or partners.
It covers negligence, errors & omissions, breach of duty and civil liability. It also covers business interruption and significant legal costs incurred on being sued. Extensions like defamation, loss of documents, dishonest conduct of employees, unintentional breach of confidence, potential infringement of intellectual property rights that arises.
Need for Professional Indemnity
Companies that perform professional services for others can make mistakes overlook a critical piece of information, misstate a fact, be misunderstood, forget to do something, misplace something, etc. and be sued by their clients over allegations such as:
  • Error, omission, or misrepresentation in providing a service.
  • Failure to provide a service in a timely fashion, or at all.
  • Failure to keep client information confidential.
Professionals who require PI
  • Solicitors
  • Medical Practitioners
  • Architects, Engineers, Interior designers, Property and Construction Consultants etc.
  • Financial Advisors
  • Financial Institutions
  • Charted Accountants
  • Real Estate and Letting Agents
Cyber Insurance is designed to protect commercial businesses against a wide range of first and third-party liability occurring out of cyber exposures associated with e-business, internet, networks and information assets. Companies with access to private & confidential information about their customers have a responsibility to keep it secure. Equally, companies who have a web presence or a dependency on technology have emerging content and transactional exposures. Cyber risk is steadily increasing concerns around data security affecting hundreds of millions of records a year and reporting of breaches continue to rise at a dramatic rate. The introduction of viruses and unauthorized access are well known examples.
Policy Features
First Party Cover:
  • E-Theft is a loss incurred in the process of transferring funds or property or any given value, due to the fraudulent input of data into a computer system or through a network into a computer system.
  • E-communication is a loss caused due to a customer having transferred funds or property or given any value, on the faith[1] of any fraudulent communication for which loss you are held legally liable.
  • E-Threat exemplifies loss including the cost of a professional negotiator and any payment made or any fund or property surrender intended as an extortion payment.
  • E-Vandalism covers losses even when the vandalism is caused by an employee.
  • E-Business interruption including extra expenses
  • Privacy Notification Expenses including the cost of credit monitoring services or similar services for affected customers. (Subject to a sub limit)[2]
  • Crisis Expenses including the cost of public relations consultants. (Subject to a sub limit) .
  • Crisis Expenses including the cost of public relations consultants. (Subject to a sub limit) .
Third party liability:
  • Disclosure Liability including customer claims due to system security failures resulting in unauthorized access to or dissemination of private information on the Internet.
  • Content Liability including claims for intellectual property, trademark and copyright infringement.
  • Reputational Liability includes claims alleging disparagement of products or services, libel, slander, defamation and invasion of privacy.
  • Conduit Liability including claims arising from system security failures that result in harm to third-party systems.
  • Impaired Access Liability includes claims due to system security failure resulting in systems being unavailable to customers.
  • Defense Costs cover any cost incurred in defending any claim brought by a government agency or licensing or regulatory organization.
  • Defence Costs in advance of the final disposition of any cyber liability claim and within 30 days of receipt of invoice for such costs.
  • Claims definition includes Extradition proceedings.
  • Prior Notice Exclusion: Excludes prior notice of a fact or circumstance that has been accepted by the previous insurer rather than notice given.
  • Full Severability of Exclusions : Knowledge of one Insured Person is not imputed to another and only knowledge possessed by the Chief Executive Officer, Chief Financial Officer or the Chief Operating Officer of the Organization will be imputed to the Organization.
A commercial crime policy typically provides several different types of crime coverage including employee dishonesty, forgery or alteration, computer fraud, funds transfer fraud, money & securities and money orders and counterfeit money.
Every company is susceptible to white collar crime. Initially offences may seem inconsequential, over time however, they multiply and cause significant losses to an organization.
Need for Crime Policy
  • Theft by employees or management includes direct theft of cash or business assets, falsification of claim expenses or payroll fraud.
  • Collusion between employee and a third party receiving bribes or commissions from a supplier for awarding of a contract, failure of an employee to disclose financial interest in a transaction.
  • Computer fraud such as diverting funds from bank accounts, stealing intellectual property, posing as a legitimate business on the Internet and obtaining payment for goods or services.
Coverages:
  • Employee Theft Coverage: Loss of money, securities or other property by theft or forgery by an identifiable employee of the Insured.
  • Premises Coverage: Losses from destruction, disappearance or wrongful abstraction or computer theft of money or securities from the Insured premises by third parties.
  • Transit Coverage: Losses sustained due to the destruction, disappearance or abstraction of money and securities outside the Insured’s premises by a third party, while being conveyed by the Insured, an armoured motor vehicle company or any person authorised by the Insured.
  • Depositors Forgery Coverage: Losses from instruments such as cheques fraudulently drawn on Insured’s accounts by a third party.
  • Computer Fraud Coverage: An extension to cover losses sustained and expenses incurred by an insured due to a computer fraud or violation by a third party.
This indemnity policy typically covers for perils like kidnap, extortion, wrongful detention, hijacking, insuring loss incurred. The policy do not pay ransoms on the behalf of the insured. Typically, the insured first pays the ransom, and seek reimbursement for the losses incurred, and then seek reimbursement under the policy.
Losses typically reimbursed by K&R insurance include:
  • Ransom monies – Money paid or loss incurred due to kidnapping
  • Transit/delivery – Loss due to destruction, disappearance, confiscation, or wrongful appropriation of ransom monies being delivered to a covered kidnapping or extortion
  • Accidental death or dismemberment – Death or permanent physical disablement occurring during a kidnapping
  • Judgements and legal liability – Cost resulting from any claim or suit brought by any insured person against the insured.
  • Additional expenses – Medical care, severe disruption of operations, potential damage to company brand, PR counsel, wage and salary replacement, relocation and job retraining, and other expenses related to a kidnapping incident.
The policies also typically covers fees and expenses of crisis management consultants. These consultants provide advice to the insured on how to best respond to the incident. Even the most basic training for people traveling to dangerous places is not easily provided nor is obtained by small to mid-sized companies.
Companies recognize the need to be a part of the global marketplace, and corporate employees conducting business outside their own countries expect to encounter language barriers, exotic customs, and diverse negotiating styles. What they cannot predict is political upheaval and the increasing danger of abduction and extortion. The goal of our entire program is the safe return of the hostage or the satisfactory resolution of a crisis—a goal from which we do not deviate. Professional assistance before, during, and after a kidnapping or extortion threat is a vital element of corporate risk management.
  • Kidnap/Ransom Coverage responds whether a person is actually abducted or someone paid a ransom.
  • Extortion Coverage includes protection for threats such as:
    • Damage to any premises or tangible property located on the insured’s premises.
    • Contamination of raw materials or products of the client.
    • Disseminate, divulge, or utilize proprietary information of the insured.
    • A computer virus against an insured.
  • Delivery coverage: Insures money or other conveyed property used to pay a ransom or extortion demand.
  • The Policy extends coverage for additional expenses and legal costs accrued to gain the release of a hostage. Those expenses may include fees of independent negotiators, interest costs on loans taken for extortion or ransom payment, salary continuation, consequential personal financial loss, and reasonable medical expenses.
  • Political Threat coverage: Covers expenses incurred when a person is wrongfully detained by anyone acting for a government or with the government’s approval.
  • Optional Threat Response expense coverage: Provides for expenses incurred when the insured utilizes the additional services to investigate extortion threats when no monetary ransom demand has been made.
Many dream of taking their company public. Talent and passion transform the dream into reality. But the reality is fraught with risk. Investors who helped to achieve the dream can turn it into a testing reality. Directors of newly floated companies run the ever-increasing risk of being sued or investigated if investor expectations are not met.
The road to a public offering is hazardous. Investors and their advisers must be presented with detailed information based on which the financial position and prospects of the company being floated, is analysed. Directors and others face a difficult task in ensuring that all relevant information and material facts regarding the company are presented accurately.
Is it ever possible to be fully confident of total accuracy?
Investors experiencing loss in the value of their shares will seize upon any mistake or misrepresentation made during such presentations, and make claim relating to defects in information, that encouraged them to invest in the company.
Given the hype of a pre-IPO with most companies, there is increased scrutiny and accountability post-raising of capital.
Before an IPO
  • IPO’s are a marketing event for the issuer
  • Can they live up to the hype ?
After-Market Performance Issues
  • Is the management up to the challenge? Disappoint and the stock price will plunge!
  • Are the directors qualified to run a public listed company?
  • Can it beat analyst expectations? What are the analysts saying anyway?
  • Can they fulfill Regulatory reporting laws? – stock exchange and / or securities commissions.
  • Failure to report accurately, late reporting or just telling plain lies?
What are the exposures?
  • What are they using the money raised for?
  • Overcompensated or over matched management?
  • Failure to disclose
  • Forward looking statements
  • Profile and accuracy of resumes of directors and management
  • False promises!
  • Quality of investment bank/adviser to the IPO.
Who can sue?
  • Investors may bring an action against for an alleged misrepresentation, error, or omission in the prospectus on which they had relied to make their investment.
  • Regulatory bodies have authority to initiate proceedings against the parties to an offering, for allegations of wrongdoing or breach of the listing rules.
Why take a POSI policy?
  • POSI gives companies the opportunity to ring-fence the significant and long-term exposure presented by security
  • POSI, being a transaction specific product ensures suitable coverage to the insureds and protects the existing D&O contract.
  • Accounting rules may allow the premium of a POSI to be capitalized against the offer proceeds, without being considered as a bottom line deduction of the company’s financials .
Public offering of securities insurance is a specialist product which is tailored to indemnify Insured against claims arising due to errors, omissions, misrepresentation, or non-disclosure in documents issued to potential investors and cover costs involved in defending such allegations.
The policy can provide the directors, the selling shareholders and the company with a number of separate and distinct benefits including:
  • Protection against some of the potential statutory exposures.
  • The option of a stand-alone policy, specifically tailored to ‘ring-fence’ the exposures from the transaction, which does not dilute or erode existing directors and officer’s liability insurance arrangements.
  • Coverage is typically negotiated to include protection against the liabilities arising from the issue of the path finder or ‘red-herring’ prospectus, the roadshow presentation, and any press releases.
  • Policy coverage cannot be cancelled by insurers without the insureds’ consent, and is typically arranged for 3-6 years’ duration, with a one-off premium levied for the full period of the policy.
  • The policy can be designed to cover exposures arising from other jurisdictions.
Costs Covered: The insurance covers legal costs incurred in defending civil and criminal proceedings relating to prospectus liability as well as any judgements or settlements entered into.
Period of Cover: It is purchased for a period of three to six years for a single premium payment. However, other lengths of time can be considered by Underwriters.
Who should buy a POSI policy?
POSI is designed for any company that is raising capital through the publication of a prospectus. It can provide cover for introductory offerings (IPO), secondary offerings and can also cover private placements. The POSI policy covers the company and its directors, officers and employees for securities claims raised against them with regard the offering.
Isn’t this also covered under the Directors’ and Officers’ Insurance?
Whilst a D&O policy may cover some of the claims that might arise they are not designed to address all the risks arising from a prospectus and listing process. Typically they do not cover claims against the company. Even if the policy is suitably worded, these policies are renewable annually for a new premium. Claims relating to a prospectus most often arise in the period 12 to 24 months after the prospectus was issued. In an annual D&O policy, premium may be increased or cover withheld on renewal if there is a potential prospectus claim.
Why clinical trial Insurance policy?
Clinical Trials in research are vital in finding new, better and more effective medication. Whenever any new medicine/therapy is to be launched, it must first be tested in lab on animal or human cell. There are commercial advantages to the firm that produce the first approved drug for a disease. That being the position, there is dramatic increase of clinical trials. India has now become a favorable destination for clinical trials because of availability of expertise infrastructure, availability of a research subject and low costs. In today’s litigant society, parties are sued regardless of who or what caused injury or death.
With such realities, insurance must form part of any risk management philosophy of the company interested in clinical trial. As a part of any clinical trial monitoring, an insurance cover is essential. Even then in spite of all precautions being there, liability will arise because of the human element and other factor and hence need insurance.
Scope of Cover
The Clinical Trials Insurance policy covers legal liability arising out of:
  • Lack of care, negligence, resulting in bodily Injury or death of a Research Subject (person participating in the Trial)
  • All reasonable Legal Costs & expenses including Defense cost as per the compensation guidelines
Some of the other highlights of the policy are:
  • Broad definition of Insured under the policy
  • Cover provided to the research subject in case of death/injury. Research subject means dependents, heirs, executors, administrators and legal representatives.
  • Provision to pay compensation as per guidelines of the policy
  • Manslaughter Defense Costs (Ethics Committee)
  • Cover can be extended to cover full medical expenses
Pays all sums for which the insured shall become legally liable as compensation for physical loss or destruction of or damage to goods or merchandise, while in transit, including during loading or unloading and while temporarily housed on or off vehicles in the ordinary course of transit.
Scope of cover:
  1. Damage to cargo directly caused by fire, explosion or accident to the carrying vehicle
  2. Carrier’s liability for cargo
  3. Cargo salvage, transhipment, emergency storage costs
  4. Financial loss due to the lost freight in respect of the damaged part of the cargo
  5. Legal and other costs, incurred in the litigation against the claimants
  6. Costs of average adjusters
  7. Breakage due to improper handling
  8. Flood or water damage or damage by other cargo
It is a compensation payable under a scheme set out in the workmen Compensation Act of India, monitored by the Ministry of Labor. The policy covers statutory liability of an employer for the death of or bodily injuries or occupational diseases sustained by workmen in the insured’s immediate service and during the course of employment. Costs or expenses incurred by the insured employer, with the consent of the company, to defend any claims are paid in addition to the above.
Laws under WC Policy
The policy covers legal liability of an employer under
  • Workmen Compensation Act 1923 and subsequent amendments of the said Act prior to the date of issue of the policy
  • Indian Fatal Accidents Act 1855, and subsequent amendments of the said Act prior to the date of issue of the policy
  • Common Law
Need for policy
  • Any employer, whether as principal or contractor, engaging “workmen” as defined in the workmen compensation Act
  • Any Employer of employees who do not qualify as “workmen” but share an employee-employer relationship
Scope of coverage
  • Death
  • Permanent Total Disability
  • Permanent Partial Disability
  • Legal cost and Expenses incurred with the companies’ consent
The amount of compensation payable is calculated as per the WC Act using factors like age of the individual, the nature of disability and the last drawn salary. Premium rates are based on the nature of duties performed and on the basis of annual estimated wages disbursed to the workmen,
This insurance does not cover any interest and/or penalty which may be imposed on account of failure to comply with the statutory requirements laid out.
Title insurance is a cover that protects a potential owner of a property against loss from defects in title.
Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property.
A title insurance policy insures against events that occurred in the past and the people who owned it, for a one-time premium paid at the closure of the escrow.
Coverage
Title insurance protects against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy.
Who is Insured
  1. Initially insures the promoter/builder acquiring ownership of the property
  2. Eventually benefits the transferee at the event of a sale agreementbetween the buyer(s) or allottee(s) of the said property.
What is Insured
  1. The Policy protects the rights of an owner, of the property, thereon against a range of risks that may affect the ownership of the land/building
  2. Covers any legal or defense costs against insured risks in the event of a claim.
How does Title Insurance Work
After the escrow officer or lender opens the title order, the title agent or attorney begins a title search. A Preliminary Report is issued to the customer for review and approval. All closing documents are recorded upon escrow’s instruction. After recordings has been confirmed, demands are paid, funds are disbursed, and the actual title insurance policy is created.
What is an Escrow
Owner policy : Escrow refers to the process in which the funds of a transaction (such as the sale of a house) are held by a third party, often the title company or an attorney in the case of real estate, pending the fulfillment of the transaction.
During the purchase of a property, you receive a document most often called a deed, which shows the seller transferred their legal ownership, or “title” to their property, to the buyer. Title insurance provide protection against law suits and claim against the property covered and purchased. Common claims come from a previous owner’s failure to pay taxes or from contractors not being paid for their services and labour on the property before you purchased it.
Lender’s policy: Most lenders require and insist the mortgagees to purchase a lender’s title insurance policy, which protects the amount they lend to pay for its legal defense costs and reimburse any mortgage payments mortgagee can’t make because he/she has lost the house to someone else’s claim on it. Lenders might alternatively want to buy an owner’s title insurance policy, which can help protect their financial investment in the property covering their legal fees and other losses, as yet another step toward protecting the lender’s collateral.
Construction Loan policy In many situations, separate policies exist for construction loans. Title insurance for construction loans requires a Date Down endorsement that recognizes that the insured amount for the property has increased due to construction funds that have been vested into the property.
Scope of cover:
  1. Regulatory Risks
    1. Revocation of clearances given by authorities like the State Revenue Dept, Municipality, Environment Dept., etc. cleared by them as per existing rules
  2. Ownership Risks
    1. Challenges to the Ownership of the property arising from Title dispute, Partition dispute, Illegal Possession, Landlord-Tenant dispute, Succession dispute, Contractual disputes, Developer-Landlord dispute, Mortgage-Loan dispute, etc.
  3. Error & Omission Risks
    1. Errors and Omissions committed at the time of conducting Title Search by the Conveyance Practitioner or in conferring appropriate permits or sanctions by the relevant authority provided by law
At the most extreme, the seller may knowingly sell you a property he or she doesn’t own.
What is the Sum Insured for Title Insurance?
Typically, Title Insurance pays for the loss incurred due to title defects up to the sum insured, which generally is the value of the property or legal expenses to defend the case. However, additional coverage could be structured based on client requirements.
Sum Insured will include
  1. The Market Value of the Land
    1. Completed Cost of Construction
    2. Can be taken on Full Value or Loss Limit basis
  2. Provision for Escalation
What are the parameters considered to arrive at the premium for Title Insurance
  1. Property Type (whether Residential or Commercial)
  2. Location of the risk
  3. Purchase Price of the Property
  4. Loan amount involved
  5. Amount of coverage Opted
  6. Transaction Type and Title Service Fees
Exclusions –
  1. Violation of any existing Law(s) or bye-law(s), or future action by the government concerning
    1. Land use
    2. Structures built on the Land
    3. Environmental protection
    4. Conservation
  1. This exclusion does not apply to violations or the enforcement of those matters which appear in the Public Records at the Policy Date and does not limit the coverage provided in the policy
    1. Risks that are created, allowed, or agreed to by Insured
    2. Structures which have not been built in accordance with applicable building codes and standards, or the infestation or dilapidation of those structures.
Basis of Indemnity to include :
  1. Pecuniary loss from dispute / revocation of Title including Market Value of the Lost Property
  2. Legal costs to defend proceedings
Proposal & Duty of Disclosure :
  1. Disclosure of all material facts and documentation in respect of the Title to the property true to the best of their knowledge that would affect the acceptance of the risk by the insurer or enhance them.
  2. Any failure may compel the Insurer to reduce its liability under the Policy in respect of a claim, or may cancel the contract of insurance.
Inherent Defects Insurance provides protection to building owners, occupiers and others with an interest in building against damage or the threat of collapse due to a defect in the structure of the building including the external walls and roofs, irrespective of whether these last two items are “structural” or not. The defect must be undiscovered at the date of practical completion of the building and occur during the period of 5 to 10 years after that date which is the usual policy period. The cover is available for commercial and industrial buildings and large residential blocks.
Resultant damage to other elements of the insured building including the cost of assessing the defect and reinstating such elements are included within the indemnifiable repair costs. Further, where the building requires some remedial work or strengthening to relieve the continuing effects of the inherent defect then these costs are also met under the policy.
Also covered are the cost of debris removal, professional fees and changes in the method of repair required to satisfy Local Authorities or similar regulatory requirements.
Extensions to the cover are available to include weatherproofing defects in external walls and roofs and waterproofing/seepage defects in basements. These additional levels of cover do no come into force until after an initial 12 month period from practical completion.
WHEN SHOULD COVER BE ARRANGED?
Building projects should be proposed for insurance as early as possible and preferably before any work commences on the site. This enables sufficient time for the risk to be assessed and for the insurers’ technical advisors to have a full and effective role. Proposals for insurance after the commencement of construction may be considered but the increased risk to insurers may be reflected in the scope of cover available and the cost of the insurance and, in some cases, regrettably no cover will be available at all.
WHO IS INSURED?
The benefit of the policy is for building developers, owners, their funders and subsequent owners, tenants and other users or occupiers of the building. Generally the policy is not for the benefit of the professional team and contracting parties against whom insurers retain the rights of recourse. Requests to include the interest of such parties within the policy or for insurers to otherwise waive rights of recourse are considered on a case by case basis. Where rights are waived the involvements of the insurers’ technical advisors may be increased coupled with a consequent increase in the insurance terms.
WHAT SHOULD THE SUM INSURED BE?
The sum insured should represent the total rebuilding costs of the building at the date of inception of the policy including if required an item in respect of debris removal and professional fees. The estimated contract value is adopted at proposal stage for the purpose of calculating the deposit premium. A limit of indemnity may be sought and depending upon the level chosen a suitable reduction in premium level may be available. Whatever sum insured is selected it may be index linked throughout the period of insurance either fully or for the purpose of the application of the policy average condition. Full details of indexation are available.
WHAT EXCLUSIONS APPLY?
Where the new building works involve retained facades and the like these may be incorporated within the policy for resultant damage to them arising out of an inherent defect.
Loss of rental income and removal/relocation expense may be insured following a claim under the 10 years material damage policy. Loss of rental income insurance is generally arranged on an annually renewable basis with an appropriate sum insured, indemnity period and time exclusion.
Directors’ and Officers’ Liability insurance provides cover for
1. Personal liability arising out of a wrongful act
2. The entity for reimbursement of those Directors and Officers
3. The entity for liability arising out of securities related lawsuits
Policies are underwritten on a worldwide jurisdiction basis to clients domiciled around the world.
We advise organizations in diverse industry segments and offer tailored solutions to suit individual clients’ needs.
NEED FOR D&O
As a member of the board or an executive officer of a company, you may be personally held liable for any actual or alleged breach of duty, trust, breach warranty, authority, neglect, errors, misstatement, or omissions by anyone in company and can be sued for transactions alleging in financial losses. Exposure varies from shareholders, creditors, business partners, competitors, regulators and employees.
COVERAGE
The policy reimburses the company to the extent it has been insured with respect of such claims, under its Articles of Association or any other contract that effects its Directors and Officers.
  • An outside or non-executive or independent director in a company is also covered.
  • The policy can additionally be endorsed to cover the directors and officers of its subsidiaries, including those acquired or created during the policy period.
  • Specific coverage can be afforded to directorships held in outside boards/ nominee directorships held at the request of the company.
  • Defence costs shall be payable under alleged criminal cases, if the directors and officers are finally acquitted of the wrongful act.
  • The wrongful act is that are discovered after the director leaves the company.
  • Incase of a director’s death, the insurer will defend the director and prevent spillover liabilities from affecting their heirs, estates and legal representatives.
Employee practices liability insurance is of utmost importance for any business. This type of policy provides coverage to a business in relation to its employees in relation to age, sex, harassment, disability, breach of contract, wrongful termination or race.
Large businesses often have multiple EPLI policies to equip them in handling lawsuits filed against their favour. EPLI helps a business in decreasing its chances of being targeted in a lawsuit. Unfortunately, small businesses overlook the importance such policies.
Insurance providers during any proposal, thoroughly review a company’s employment practice and makes sure necessary amendments are implemented prior to the contract.
EPLI provides protection against many kinds of employee lawsuits, including coverage of claims arising from:
  • Sexual harassment
  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Negligent evaluation
  • Failure to employ or promote
  • Wrongful discipline
  • Deprivation of career opportunity
  • Wrongful infliction of emotional distress
  • Mis-management of employee benefit plans
This policy protects your business from financial losses, includes legal costs and compensations arising from property damage or bodily injury caused to any third party due to –
  • The services rendered
  • In-course of business operations
  • Negligence of any employee
  • Includes, non-professional neligent acts: Up to the precribed limits fore-mentioned by the policy
Claims may arise
  • While visiting your business, a customer trips on loose flooring and is injured.
  • An employee in your painting or construction business accidentally leaves water running, causing substantial damage to a customer’s home.
  • A class action lawsuit is filed against your business, alleging advertisements constituted misleading information.
Standard CGL includes :
Coverage A: Bodily injury and property damage
This cover provides protection against losses from the legal liability for bodily injury or property damage to others arising out of non-professional negligent acts or for liability arising out of their premises or business operations. Mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.
Coverage B: Personal and advertising injury
Personal and advertising injury protects an insured against liability arising out of offences, such as:
  • Libel
  • Slander
  • False arrest
  • Infringing on another’s copyright
  • Malicious prosecution
  • Use of another’s advertising idea
  • Wrongful eviction, entry or invasion of privacy
Coverage C: Medical Payments
Medical payments includes limited coverage for injuries sustained by a non-employee caused due to an accident that takes place on the insured’s premises or when exposed to the insured’s business operations. CGL pays for all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing and funeral expenses for a person injured or killed in an accident taking place at the insured’s premises or arising from business operations.
Claims Made V/s Occurrence Based policy
" A ‘Claims Made Policy’ is where the claim would occur and has to be lodged within the policy period. This is usually given in conventional CGL policy & would only become relevant when the policy is not renewed subsequently. "
" Occurrence Based Policy is relevant to CGL Policy where the claims, which have taken place during the currency of the policy, can be lodged even after the expiry of the policy period, even if the policy is not renewed "
Product Recall insurance covers expenses associated with recalling a product from the market that would be responsible for possible bodily injury or property damage from its continued use or existence. Standard product liability insurance does not cover this exposure. This cover is typically purchased by manufacturers such as food and beverage, toy and electronics, automobiles and automobile components, aviation parts etc. to cover costs such as customer notification, shipping costs and disposal costs.
Scope of Cover
  • Recall expenses, such as disposal, replacement, advertising and transport
  • Pre-recall expenses
  • Third party recall expenses
  • Government recalls
  • Business interruption
  • Loss of gross profits/revenue
  • Accidental contamination
  • Product rehabilitation
  • Increased cost of working after a recall
  • Extortion demands related to malicious tampering
  • Terrorism cover
  • Terrorism cover
  • Consultancy costs
Technology companies face unique risks and require specific
Product Recall insurance covers expenses associated with recalling a product from the market that would be responsible for possible bodily injury or property damage from its continued use or existence. Standard product liability insurance does not cover this exposure. This cover is typically purchased by manufacturers such as food and beverage, toy and electronics, automobiles and automobile components, aviation parts etc. to cover costs such as customer notification, shipping costs and disposal costs.
Scope of Cover
  • Recall expenses, such as disposal, replacement, advertising and transport
  • Pre-recall expenses
  • Third party recall expenses
  • Government recalls
  • Business interruption
  • Loss of gross profits/revenue
  • Accidental contamination
  • Product rehabilitation
  • Increased cost of working after a recall
  • Extortion demands related to malicious tampering
  • Terrorism cover
  • Terrorism cover
  • Consultancy costs
Technology companies face unique risks and require specific insurance coverages to protect their business from financial loss. Technology professional indemnity insurance is a key element of risk management for a technology company in today’s world.
E&O insurance covers your legal liability arising from professional services in the event of a third party claim stemming from professional negligence. Professionals may owe a duty of care to anybody who might reasonably rely upon the service or advice they have provided. In today’s commercial world, clients expect high standards of service and are more inclined to resort to litigation when such standards have not been met.
Typical reasons that professional indemnity claims are made against a technology company include:
  • Programming error
  • Poor customer communication
  • Problems with large integration/installation projects
  • Development problems
  • Problems with combining or integrating software or hardware components
  • Customer changing project scope (often referred to as “project creep”)
  • Turnover of key personnel
  • Short cuts during testing
  • Poor accounts receivable controls that require the tech company to sue their customer for fees owed and this results in a countersuit for negligence in the performance of the tech services/products
  • Shortfall in externally furnished products or externally performed tasks
Scope of Cover:
  • The Policy: provides indemnity for losses arising from civil liability (including liability for claimant’s costs and expenses incurred) arising in connection with your professional services including:
    • Breach of professional duty
    • Infringement of copyright or intellectual property rights
    • Breach of confidentiality
    • Defamation – and other types of civil liability.
  • Insured Person: cover extends to include you, partners (or members of limited liability partnerships), directors, employees and their personal representatives in the event of death, incapacity, insolvency or bankruptcy.
  • Fraud and Dishonesty Cover: liability of your business to any third party resulting from fraudulent or dishonest conduct.
  • Lost Documents Cover: costs of replacing or restoring documents lost or damaged ‘in transit’ or in your custody.
  • Specialist Consultants Cover: claims resulting from any wrongful act of your specialist consultants, designers or subcontractors engaged in the performance of your professional services.
It covers the cost of mistakes made when providing professional services.
In today’s busy business world, anyone is at risk of making a mistake no matter how professional or diligent they may be. Some mistakes are minor with little or no financial cost or consequence, but others can be far more serious and not having adequate insurance cover can financially destroy a company, its directors or partners.
It covers negligence, errors & omissions, breach of duty and civil liability. It also covers business interruption and significant legal costs incurred on being sued. Extensions like defamation, loss of documents, dishonest conduct of employees, unintentional breach of confidence, potential infringement of intellectual property rights that arises.
Need for Professional Indemnity
Companies that perform professional services for others can make mistakes overlook a critical piece of information, misstate a fact, be misunderstood, forget to do something, misplace something, etc. and be sued by their clients over allegations such as:
  • Error, omission, or misrepresentation in providing a service.
  • Failure to provide a service in a timely fashion, or at all.
  • Failure to keep client information confidential.
Professionals who require PI
  • Solicitors
  • Medical Practitioners
  • Architects, Engineers, Interior designers, Property and Construction Consultants etc.
  • Financial Advisors
  • Financial Institutions
  • Charted Accountants
  • Real Estate and Letting Agents
Cyber Insurance is designed to protect commercial businesses against a wide range of first and third-party liability occurring out of cyber exposures associated with e-business, internet, networks and information assets. Companies with access to private & confidential information about their customers have a responsibility to keep it secure. Equally, companies who have a web presence or a dependency on technology have emerging content and transactional exposures. Cyber risk is steadily increasing concerns around data security affecting hundreds of millions of records a year and reporting of breaches continue to rise at a dramatic rate. The introduction of viruses and unauthorized access are well known examples.
Policy Features
First Party Cover:
  • E-Theft is a loss incurred in the process of transferring funds or property or any given value, due to the fraudulent input of data into a computer system or through a network into a computer system.
  • E-communication is a loss caused due to a customer having transferred funds or property or given any value, on the faith[1] of any fraudulent communication for which loss you are held legally liable.
  • E-Threat exemplifies loss including the cost of a professional negotiator and any payment made or any fund or property surrender intended as an extortion payment.
  • E-Vandalism covers losses even when the vandalism is caused by an employee.
  • E-Business interruption including extra expenses
  • Privacy Notification Expenses including the cost of credit monitoring services or similar services for affected customers. (Subject to a sub limit)[2]
  • Crisis Expenses including the cost of public relations consultants. (Subject to a sub limit) .
  • Crisis Expenses including the cost of public relations consultants. (Subject to a sub limit) .
Third party liability:
  • Disclosure Liability including customer claims due to system security failures resulting in unauthorized access to or dissemination of private information on the Internet.
  • Content Liability including claims for intellectual property, trademark and copyright infringement.
  • Reputational Liability includes claims alleging disparagement of products or services, libel, slander, defamation and invasion of privacy.
  • Conduit Liability including claims arising from system security failures that result in harm to third-party systems.
  • Impaired Access Liability includes claims due to system security failure resulting in systems being unavailable to customers.
  • Defense Costs cover any cost incurred in defending any claim brought by a government agency or licensing or regulatory organization.
  • Defence Costs in advance of the final disposition of any cyber liability claim and within 30 days of receipt of invoice for such costs.
  • Claims definition includes Extradition proceedings.
  • Prior Notice Exclusion: Excludes prior notice of a fact or circumstance that has been accepted by the previous insurer rather than notice given.
  • Full Severability of Exclusions : Knowledge of one Insured Person is not imputed to another and only knowledge possessed by the Chief Executive Officer, Chief Financial Officer or the Chief Operating Officer of the Organization will be imputed to the Organization.
A commercial crime policy typically provides several different types of crime coverage including employee dishonesty, forgery or alteration, computer fraud, funds transfer fraud, money & securities and money orders and counterfeit money.
Every company is susceptible to white collar crime. Initially offences may seem inconsequential, over time however, they multiply and cause significant losses to an organization.
Need for Crime Policy
  • Theft by employees or management includes direct theft of cash or business assets, falsification of claim expenses or payroll fraud.
  • Collusion between employee and a third party receiving bribes or commissions from a supplier for awarding of a contract, failure of an employee to disclose financial interest in a transaction.
  • Computer fraud such as diverting funds from bank accounts, stealing intellectual property, posing as a legitimate business on the Internet and obtaining payment for goods or services.
Coverages:
  • Employee Theft Coverage: Loss of money, securities or other property by theft or forgery by an identifiable employee of the Insured.
  • Premises Coverage: Losses from destruction, disappearance or wrongful abstraction or computer theft of money or securities from the Insured premises by third parties.
  • Transit Coverage: Losses sustained due to the destruction, disappearance or abstraction of money and securities outside the Insured’s premises by a third party, while being conveyed by the Insured, an armoured motor vehicle company or any person authorised by the Insured.
  • Depositors Forgery Coverage: Losses from instruments such as cheques fraudulently drawn on Insured’s accounts by a third party.
  • Computer Fraud Coverage: An extension to cover losses sustained and expenses incurred by an insured due to a computer fraud or violation by a third party.
This indemnity policy typically covers for perils like kidnap, extortion, wrongful detention, hijacking, insuring loss incurred. The policy do not pay ransoms on the behalf of the insured. Typically, the insured first pays the ransom, and seek reimbursement for the losses incurred, and then seek reimbursement under the policy.
Losses typically reimbursed by K&R insurance include:
  • Ransom monies – Money paid or loss incurred due to kidnapping
  • Transit/delivery – Loss due to destruction, disappearance, confiscation, or wrongful appropriation of ransom monies being delivered to a covered kidnapping or extortion
  • Accidental death or dismemberment – Death or permanent physical disablement occurring during a kidnapping
  • Judgements and legal liability – Cost resulting from any claim or suit brought by any insured person against the insured.
  • Additional expenses – Medical care, severe disruption of operations, potential damage to company brand, PR counsel, wage and salary replacement, relocation and job retraining, and other expenses related to a kidnapping incident.
The policies also typically covers fees and expenses of crisis management consultants. These consultants provide advice to the insured on how to best respond to the incident. Even the most basic training for people traveling to dangerous places is not easily provided nor is obtained by small to mid-sized companies.
Companies recognize the need to be a part of the global marketplace, and corporate employees conducting business outside their own countries expect to encounter language barriers, exotic customs, and diverse negotiating styles. What they cannot predict is political upheaval and the increasing danger of abduction and extortion. The goal of our entire program is the safe return of the hostage or the satisfactory resolution of a crisis—a goal from which we do not deviate. Professional assistance before, during, and after a kidnapping or extortion threat is a vital element of corporate risk management.
  • Kidnap/Ransom Coverage responds whether a person is actually abducted or someone paid a ransom.
  • Extortion Coverage includes protection for threats such as:
    • Damage to any premises or tangible property located on the insured’s premises.
    • Contamination of raw materials or products of the client.
    • Disseminate, divulge, or utilize proprietary information of the insured.
    • A computer virus against an insured.
  • Delivery coverage: Insures money or other conveyed property used to pay a ransom or extortion demand.
  • The Policy extends coverage for additional expenses and legal costs accrued to gain the release of a hostage. Those expenses may include fees of independent negotiators, interest costs on loans taken for extortion or ransom payment, salary continuation, consequential personal financial loss, and reasonable medical expenses.
  • Political Threat coverage: Covers expenses incurred when a person is wrongfully detained by anyone acting for a government or with the government’s approval.
  • Optional Threat Response expense coverage: Provides for expenses incurred when the insured utilizes the additional services to investigate extortion threats when no monetary ransom demand has been made.
Many dream of taking their company public. Talent and passion transform the dream into reality. But the reality is fraught with risk. Investors who helped to achieve the dream can turn it into a testing reality. Directors of newly floated companies run the ever-increasing risk of being sued or investigated if investor expectations are not met.
The road to a public offering is hazardous. Investors and their advisers must be presented with detailed information based on which the financial position and prospects of the company being floated, is analysed. Directors and others face a difficult task in ensuring that all relevant information and material facts regarding the company are presented accurately.
Is it ever possible to be fully confident of total accuracy?
Investors experiencing loss in the value of their shares will seize upon any mistake or misrepresentation made during such presentations, and make claim relating to defects in information, that encouraged them to invest in the company.
Given the hype of a pre-IPO with most companies, there is increased scrutiny and accountability post-raising of capital.
Before an IPO
  • IPO’s are a marketing event for the issuer
  • Can they live up to the hype ?
After-Market Performance Issues
  • Is the management up to the challenge? Disappoint and the stock price will plunge!
  • Are the directors qualified to run a public listed company?
  • Can it beat analyst expectations? What are the analysts saying anyway?
  • Can they fulfill Regulatory reporting laws? – stock exchange and / or securities commissions.
  • Failure to report accurately, late reporting or just telling plain lies?
What are the exposures?
  • What are they using the money raised for?
  • Overcompensated or over matched management?
  • Failure to disclose
  • Forward looking statements
  • Profile and accuracy of resumes of directors and management
  • False promises!
  • Quality of investment bank/adviser to the IPO.
Who can sue?
  • Investors may bring an action against for an alleged misrepresentation, error, or omission in the prospectus on which they had relied to make their investment.
  • Regulatory bodies have authority to initiate proceedings against the parties to an offering, for allegations of wrongdoing or breach of the listing rules.
Why take a POSI policy?
  • POSI gives companies the opportunity to ring-fence the significant and long-term exposure presented by security
  • POSI, being a transaction specific product ensures suitable coverage to the insureds and protects the existing D&O contract.
  • Accounting rules may allow the premium of a POSI to be capitalized against the offer proceeds, without being considered as a bottom line deduction of the company’s financials .
Public offering of securities insurance is a specialist product which is tailored to indemnify Insured against claims arising due to errors, omissions, misrepresentation, or non-disclosure in documents issued to potential investors and cover costs involved in defending such allegations.
The policy can provide the directors, the selling shareholders and the company with a number of separate and distinct benefits including:
  • Protection against some of the potential statutory exposures.
  • The option of a stand-alone policy, specifically tailored to ‘ring-fence’ the exposures from the transaction, which does not dilute or erode existing directors and officer’s liability insurance arrangements.
  • Coverage is typically negotiated to include protection against the liabilities arising from the issue of the path finder or ‘red-herring’ prospectus, the roadshow presentation, and any press releases.
  • Policy coverage cannot be cancelled by insurers without the insureds’ consent, and is typically arranged for 3-6 years’ duration, with a one-off premium levied for the full period of the policy.
  • The policy can be designed to cover exposures arising from other jurisdictions.
Costs Covered: The insurance covers legal costs incurred in defending civil and criminal proceedings relating to prospectus liability as well as any judgements or settlements entered into.
Period of Cover: It is purchased for a period of three to six years for a single premium payment. However, other lengths of time can be considered by Underwriters.
Who should buy a POSI policy?
POSI is designed for any company that is raising capital through the publication of a prospectus. It can provide cover for introductory offerings (IPO), secondary offerings and can also cover private placements. The POSI policy covers the company and its directors, officers and employees for securities claims raised against them with regard the offering.
Isn’t this also covered under the Directors’ and Officers’ Insurance?
Whilst a D&O policy may cover some of the claims that might arise they are not designed to address all the risks arising from a prospectus and listing process. Typically they do not cover claims against the company. Even if the policy is suitably worded, these policies are renewable annually for a new premium. Claims relating to a prospectus most often arise in the period 12 to 24 months after the prospectus was issued. In an annual D&O policy, premium may be increased or cover withheld on renewal if there is a potential prospectus claim.
Why clinical trial Insurance policy?
Clinical Trials in research are vital in finding new, better and more effective medication. Whenever any new medicine/therapy is to be launched, it must first be tested in lab on animal or human cell. There are commercial advantages to the firm that produce the first approved drug for a disease. That being the position, there is dramatic increase of clinical trials. India has now become a favorable destination for clinical trials because of availability of expertise infrastructure, availability of a research subject and low costs. In today’s litigant society, parties are sued regardless of who or what caused injury or death.
With such realities, insurance must form part of any risk management philosophy of the company interested in clinical trial. As a part of any clinical trial monitoring, an insurance cover is essential. Even then in spite of all precautions being there, liability will arise because of the human element and other factor and hence need insurance.
Scope of Cover
The Clinical Trials Insurance policy covers legal liability arising out of:
  • Lack of care, negligence, resulting in bodily Injury or death of a Research Subject (person participating in the Trial)
  • All reasonable Legal Costs & expenses including Defense cost as per the compensation guidelines
Some of the other highlights of the policy are:
  • Broad definition of Insured under the policy
  • Cover provided to the research subject in case of death/injury. Research subject means dependents, heirs, executors, administrators and legal representatives.
  • Provision to pay compensation as per guidelines of the policy
  • Manslaughter Defense Costs (Ethics Committee)
  • Cover can be extended to cover full medical expenses
Pays all sums for which the insured shall become legally liable as compensation for physical loss or destruction of or damage to goods or merchandise, while in transit, including during loading or unloading and while temporarily housed on or off vehicles in the ordinary course of transit.
Scope of cover:
  1. Damage to cargo directly caused by fire, explosion or accident to the carrying vehicle
  2. Carrier’s liability for cargo
  3. Cargo salvage, transhipment, emergency storage costs
  4. Financial loss due to the lost freight in respect of the damaged part of the cargo
  5. Legal and other costs, incurred in the litigation against the claimants
  6. Costs of average adjusters
  7. Breakage due to improper handling
  8. Flood or water damage or damage by other cargo
It is a compensation payable under a scheme set out in the workmen Compensation Act of India, monitored by the Ministry of Labor. The policy covers statutory liability of an employer for the death of or bodily injuries or occupational diseases sustained by workmen in the insured’s immediate service and during the course of employment. Costs or expenses incurred by the insured employer, with the consent of the company, to defend any claims are paid in addition to the above.
Laws under WC Policy
The policy covers legal liability of an employer under
  • Workmen Compensation Act 1923 and subsequent amendments of the said Act prior to the date of issue of the policy
  • Indian Fatal Accidents Act 1855, and subsequent amendments of the said Act prior to the date of issue of the policy
  • Common Law
Need for policy
  • Any employer, whether as principal or contractor, engaging “workmen” as defined in the workmen compensation Act
  • Any Employer of employees who do not qualify as “workmen” but share an employee-employer relationship
Scope of coverage
  • Death
  • Permanent Total Disability
  • Permanent Partial Disability
  • Legal cost and Expenses incurred with the companies’ consent
The amount of compensation payable is calculated as per the WC Act using factors like age of the individual, the nature of disability and the last drawn salary. Premium rates are based on the nature of duties performed and on the basis of annual estimated wages disbursed to the workmen,
This insurance does not cover any interest and/or penalty which may be imposed on account of failure to comply with the statutory requirements laid out.
Title insurance is a cover that protects a potential owner of a property against loss from defects in title.
Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property.
A title insurance policy insures against events that occurred in the past and the people who owned it, for a one-time premium paid at the closure of the escrow.
Coverage
Title insurance protects against claims from defects. Defects are things such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy.
Who is Insured
  1. Initially insures the promoter/builder acquiring ownership of the property
  2. Eventually benefits the transferee at the event of a sale agreementbetween the buyer(s) or allottee(s) of the said property.
What is Insured
  1. The Policy protects the rights of an owner, of the property, thereon against a range of risks that may affect the ownership of the land/building
  2. Covers any legal or defense costs against insured risks in the event of a claim.
How does Title Insurance Work
After the escrow officer or lender opens the title order, the title agent or attorney begins a title search. A Preliminary Report is issued to the customer for review and approval. All closing documents are recorded upon escrow’s instruction. After recordings has been confirmed, demands are paid, funds are disbursed, and the actual title insurance policy is created.
What is an Escrow
Owner policy : Escrow refers to the process in which the funds of a transaction (such as the sale of a house) are held by a third party, often the title company or an attorney in the case of real estate, pending the fulfillment of the transaction.
During the purchase of a property, you receive a document most often called a deed, which shows the seller transferred their legal ownership, or “title” to their property, to the buyer. Title insurance provide protection against law suits and claim against the property covered and purchased. Common claims come from a previous owner’s failure to pay taxes or from contractors not being paid for their services and labour on the property before you purchased it.
Lender’s policy: Most lenders require and insist the mortgagees to purchase a lender’s title insurance policy, which protects the amount they lend to pay for its legal defense costs and reimburse any mortgage payments mortgagee can’t make because he/she has lost the house to someone else’s claim on it. Lenders might alternatively want to buy an owner’s title insurance policy, which can help protect their financial investment in the property covering their legal fees and other losses, as yet another step toward protecting the lender’s collateral.
Construction Loan policy In many situations, separate policies exist for construction loans. Title insurance for construction loans requires a Date Down endorsement that recognizes that the insured amount for the property has increased due to construction funds that have been vested into the property.
Scope of cover:
  1. Regulatory Risks
    1. Revocation of clearances given by authorities like the State Revenue Dept, Municipality, Environment Dept., etc. cleared by them as per existing rules
  2. Ownership Risks
    1. Challenges to the Ownership of the property arising from Title dispute, Partition dispute, Illegal Possession, Landlord-Tenant dispute, Succession dispute, Contractual disputes, Developer-Landlord dispute, Mortgage-Loan dispute, etc.
  3. Error & Omission Risks
    1. Errors and Omissions committed at the time of conducting Title Search by the Conveyance Practitioner or in conferring appropriate permits or sanctions by the relevant authority provided by law
At the most extreme, the seller may knowingly sell you a property he or she doesn’t own.
What is the Sum Insured for Title Insurance?
Typically, Title Insurance pays for the loss incurred due to title defects up to the sum insured, which generally is the value of the property or legal expenses to defend the case. However, additional coverage could be structured based on client requirements.
Sum Insured will include
  1. The Market Value of the Land
    1. Completed Cost of Construction
    2. Can be taken on Full Value or Loss Limit basis
  2. Provision for Escalation
What are the parameters considered to arrive at the premium for Title Insurance
  1. Property Type (whether Residential or Commercial)
  2. Location of the risk
  3. Purchase Price of the Property
  4. Loan amount involved
  5. Amount of coverage Opted
  6. Transaction Type and Title Service Fees
Exclusions –
  1. Violation of any existing Law(s) or bye-law(s), or future action by the government concerning
    1. Land use
    2. Structures built on the Land
    3. Environmental protection
    4. Conservation
  1. This exclusion does not apply to violations or the enforcement of those matters which appear in the Public Records at the Policy Date and does not limit the coverage provided in the policy
    1. Risks that are created, allowed, or agreed to by Insured
    2. Structures which have not been built in accordance with applicable building codes and standards, or the infestation or dilapidation of those structures.
Basis of Indemnity to include :
  1. Pecuniary loss from dispute / revocation of Title including Market Value of the Lost Property
  2. Legal costs to defend proceedings
Proposal & Duty of Disclosure :
  1. Disclosure of all material facts and documentation in respect of the Title to the property true to the best of their knowledge that would affect the acceptance of the risk by the insurer or enhance them.
  2. Any failure may compel the Insurer to reduce its liability under the Policy in respect of a claim, or may cancel the contract of insurance.
Inherent Defects Insurance provides protection to building owners, occupiers and others with an interest in building against damage or the threat of collapse due to a defect in the structure of the building including the external walls and roofs, irrespective of whether these last two items are “structural” or not. The defect must be undiscovered at the date of practical completion of the building and occur during the period of 5 to 10 years after that date which is the usual policy period. The cover is available for commercial and industrial buildings and large residential blocks.
Resultant damage to other elements of the insured building including the cost of assessing the defect and reinstating such elements are included within the indemnifiable repair costs. Further, where the building requires some remedial work or strengthening to relieve the continuing effects of the inherent defect then these costs are also met under the policy.
Also covered are the cost of debris removal, professional fees and changes in the method of repair required to satisfy Local Authorities or similar regulatory requirements.
Extensions to the cover are available to include weatherproofing defects in external walls and roofs and waterproofing/seepage defects in basements. These additional levels of cover do no come into force until after an initial 12 month period from practical completion.
WHEN SHOULD COVER BE ARRANGED?
Building projects should be proposed for insurance as early as possible and preferably before any work commences on the site. This enables sufficient time for the risk to be assessed and for the insurers’ technical advisors to have a full and effective role. Proposals for insurance after the commencement of construction may be considered but the increased risk to insurers may be reflected in the scope of cover available and the cost of the insurance and, in some cases, regrettably no cover will be available at all.
WHO IS INSURED?
The benefit of the policy is for building developers, owners, their funders and subsequent owners, tenants and other users or occupiers of the building. Generally the policy is not for the benefit of the professional team and contracting parties against whom insurers retain the rights of recourse. Requests to include the interest of such parties within the policy or for insurers to otherwise waive rights of recourse are considered on a case by case basis. Where rights are waived the involvements of the insurers’ technical advisors may be increased coupled with a consequent increase in the insurance terms.
WHAT SHOULD THE SUM INSURED BE?
The sum insured should represent the total rebuilding costs of the building at the date of inception of the policy including if required an item in respect of debris removal and professional fees. The estimated contract value is adopted at proposal stage for the purpose of calculating the deposit premium. A limit of indemnity may be sought and depending upon the level chosen a suitable reduction in premium level may be available. Whatever sum insured is selected it may be index linked throughout the period of insurance either fully or for the purpose of the application of the policy average condition. Full details of indexation are available.
WHAT EXCLUSIONS APPLY?
Where the new building works involve retained facades and the like these may be incorporated within the policy for resultant damage to them arising out of an inherent defect.
Loss of rental income and removal/relocation expense may be insured following a claim under the 10 years material damage policy. Loss of rental income insurance is generally arranged on an annually renewable basis with an appropriate sum insured, indemnity period and time exclusion.
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IRDA Licence No. 603 | Licence Validity - 12/06/2020 to 11/06/2023