Skip to main content

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.

 

 

 

 

Comments

Post a Comment

Popular posts from this blog

Prior and Pending Litigation in Professional Indemnity Policy

  The prior and pending litigation exclusion in liability policies is a clause designed to exclude coverage for claims related to legal disputes or circumstances already known, pending, or in progress before the policy's effective date. It’s an important exclusion because it limits the insurer’s liability for events that occurred before the policy began. Here are more details about this exclusion. Purpose of the Prior and Pending Litigation Exclusion Insurers include this exclusion to avoid covering claims or disputes that were known or existed before the policy started. It ensures that the underlying policy , Directors & Officers (DnO), Professional Indemnity (PI) policy, etc., only covers new claims that arise from professional errors, omissions, or negligence occurring during the policy period and not pre-existing or ongoing legal matters. What the Exclusion Covers Prior Litigation : Any lawsuit, claim, investigation, or l...
Post a Comment
Read more

Mitigation Costs in Professional Liability Policies

  Professional Liability Insurance in India, more commonly referred to as Errors & Omissions (E&O) insurance in the case of businesses, provides the business with insurance coverage against claims of negligence, error, or omission in the services rendered by the business under insurance. In this policy, one of the features includes mitigation cost coverage. Mitigation costs are sums of money that an Insured pays to avoid or lessen the possibility of a claim arising. For example, if a business finds an error in its work that may give rise to a potential liability claim, it may incur expenses to correct such error before it generates a claim. These costs will be incurred in trying to reduce the potential damage or liability and, therefore, may be covered under a professional liability insurance policy. However for mitigation cost section claim to trigger there needs to be a claim payable under the policy. Once the claim is determined to be payable under the policy, the miti...
Post a Comment
Read more

Exclusion of insolvency and bankruptcy in D&O policies

Broadly speaking, a D&O insurance policy offers liability cover to companies' directors and officers for claims made by others resulting from decisions and actions made while undertaking their normal duties under the employment contract. The policy includes different types of exclusions; one of them is insolvency and bankruptcy exclusion. The insolvency and bankruptcy exclusion is a provision under a D&O policy that excludes coverage directly or indirectly from the insolvency or bankruptcy of the company. Purpose of the Insolvency and Bankruptcy Exclusion 1. Risk Management: The increased risk associated with a situation involving insolvency or bankruptcy is a consideration noticed by insurers while bringing forth this exclusion. In particular, claims tend to increase at times when a company is undergoing financial trouble and stakeholders are trying to recover their losses. 2. Moral Hazard: The exclusion helps cap moral hazard, whereby directors and officers may take more ...
Post a Comment
Read more