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SECURITIES ISSUERS LIABILITY POLICY

 

                                                       SECURITIES ISSUERS LIABILITY POLICY

 

Assets are significant to financial planning and they comprise fixed, movable, liquid assets etc.

Shares of listed companies are one of the instruments purchased by investors for investment, appreciation in value and for future planning. Issuance of share certificates are mostly in dematerialized format today, however to minimize the incidence of fraud SEBI (Stock Exchange Board of India) has mandated compliances from Listed companies.

 

To protect the interests of investors in securities and to promote the development of, and to regulate the securities market SEBI has mandated that the listed company shall take special contingency insurance policy from the insurance company towards the risk arising out of the requirements relating to issuance of duplicate securities in order to safeguard and protect the interest of the listed company.

 

Securities Issuers Liability policy is the right policy and safeguards the Listed Company’s interest

 

WHAT THE POLICY COVERS:

Claim arising out of a wrongful act, including those as per the requirements relating to issuance of duplicate certificates as envisaged and pursuant to SEBI regulations

 

A wrongful act is defined as any act, error, and omission relating to the issuance of securities including fraud or forgery leading to faulty recording of registration, ownership or transfer of securities

 

WHAT IS PAID UNDER THE POLICY?

All reasonable and necessary costs and expenses of the Company incurred with the prior consent of the Insurer

 

WHAT IS THE SUM INSURED?


Proposer has to the choose the Sum insured as a Limit of Liability for

Any One Event

Aggregate Limit

History of such occurrences.

 

Proposer has to provide details of the stock exchanges, number of shares etc. where the Proposer is listed

 

EXTENSIONS/ADD-ONS:

Policy provides some extensions wherever required according to the requirements of each company.

Blanket Subsidiary cover

Bilateral extended reporting period

Civil Fines & Penalties

Continuity of cover

Recording the Registrar and Risk Transfer Agents (RTA) as additional Insured’s

Waiver of Subrogation against RTA

Emergency costs

 

 

WHAT SECURITY HOLDER MUST DO IN THE EVENT OF LOSS OF SECURITIES:

In the event of a loss, the security holder must

 

Ø  Submit copy of FIR including e-FIR/Police complaint/Court injunction order/copy of plaint (where the suit filed has been accepted by the Court and Suit No. has been given), necessarily having details of the securities, folio number, distinctive number range and certificate numbers.

Ø  Issuance of advertisement regarding loss of securities in a widely circulated Newspaper

 

There shall be no requirement to comply with the above if the value of securities as on the date of submission of claim along with complete documentation as prescribed by the Board does not exceed Rs.5 Lakhs.

 

Ø  Provide the value of the securities on the basis of the closing price of such securities at any one of the recognized stock exchanges a day prior to the date of claim intimation.

 

EXCLUSIONS:
           Management Liability

Any deliberate wilful /fraudent act or omission

Wrongful act occurring before the retroactive date

 



The most relevant idea in these times is risk perception and insurance covers can be tailormade to accommodate the varied risks an individual/company is exposed to. Regulatory compliances have necessitated the inclusion of risk cover so that the financial implications following a loss are minimized /addressed.

We at Zen Insurance assist in understanding the risk exposure & in planning your insurance cover accordingly. You may contact us for assistance.

Disclaimer:   

Zen Insurance is an IRDAI registered broker which facilitates quick & accurate insurance broking services. We deal with only regulator approved products of insurers. We do not underwrite the products.

 

 

 

 

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