Directors & Officers Liability Policy to help BD insurance

Bangladesh's insurers should adopt 'Directors & Officers Liability Insurance policy' for the sake of greater protection of company managers from any claim(s) of losses charged against them, speakers said at a seminar Wednesday.
The seminar was told that the core purpose of a Directors & Officers Liability Insurance, also called D&O, policy was to provide financial protection for managers against the consequences of actual or alleged "wrongful acts" when acting in the scope of their managerial duties.
They opined that the policy cover has become a regular part of large multinational companies' risk management, but it is a sine qua non for all kinds of organisations also, they opined.
They said the insurance protects corporate directors and officers by covering legal fees, settlements, and other costs; in addition, the coverage sometimes can extend to protect the company if it is named in a suit, as well.
The call and suggestion came up at the third technical session titled 'Directors & Officers Liability Insurance' of a day-long seminar organised by Prime Insurance Company Limited at a city hotel on the day.
Director General of Bangladesh Institute of Bank Management (BIBM) Prof Dr Toufiq Ahmed Chowdhury moderated the programme where bankers and insurers were present.
Presenting a keynote paper, General Manager of General Insurance Corporation of India Parijat Dutta said the D&O market has a worldwide gross premium value of about US$10.0 billion of which the US accounts for around half or two-third (US$ 5.0 billion or US$ 7.0 billion) and the EU (European Union) is about US$ 2.0 billion.
He said the Asian market of the D&O has developed in Hong Kong, Singapore and India.
 "The D&O policy will pay for defense costs and financial losses. In addition, extensions to many D&O policies also cover costs for managers generated by administrative and criminal proceedings or in the course of investigations by regulators or criminal prosecutors," he said.
He said the D&O will also not cover cases where directors obtained illegal remuneration, or acted for personal profit.
DG of the BIBM Prof Dr Toufiq Ahmed Chowdhury said banking sector in any country cannot develop at an expected level without development of the insurance sector.
 "Insurance is the biggest industry of the financial sector in developed countries. But the scenario is different here in Bangladesh. I hope it will develop in sync with the increasingly globalised markets," he added.
Prime Insurance Company Limited Chairman Ferdous Amin and its Managing Director Mohammodi Khanam were, among others, also present at the function.

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