Rising Demand for D&O Insurance in India
The demand for Directors and Officers (D&O) insurance covers in India is experiencing significant growth, ranging between 25% to 35%. This surge is primarily driven by greater board accountability, increasing investor pressure, and regulatory interventions. According to data analyzed by Policybazaar Business, there has been a notable shift from compliance-driven purchases to proactive risk management strategies. Boards now view D&O coverage as an essential component rather than an optional one.
The analysis reveals that approximately 85% of D&O policyholders have renewed their insurance policies, indicating sustained confidence in the value of D&O coverage as a core risk management tool. Policy discontinuation remains minimal, with non-renewals primarily attributed to changes such as mergers and acquisitions, shifts in shareholding patterns, or company closures.
Several key trends have been observed in the D&O insurance landscape:
- D&O policy uptake and coverage limits are rising among companies preparing for Initial Public Offerings (IPOs).
- Environmental, Social, and Governance (ESG) failures, including environmental negligence and Diversity, Equity, and Inclusion (DEI) lawsuits, as well as cybersecurity lapses, are emerging as significant drivers of D&O exposure.
The analysis found that between 10% to 15% of D&O policyholders have reported claims, highlighting the real-world implications of leadership liability. The primary reasons for claim triggers include:
- Alleged breach of fiduciary duty
- Litigation costs
- Regulatory investigations
- Public Relations (PR) and crisis management
Moreover, businesses are increasingly opting for non-rescindable Side A-only excess policies, particularly for independent directors. This provides broader protection in cases of insolvency or lack of indemnification. Directors are also increasingly requesting D&O policy reviews before accepting board positions, reflecting heightened caution regarding personal liability.
Evaa Saiwal, head of liability insurance at Policybazaar for Business, commented, “The business landscape is undergoing a significant transformation. What once started as a compliance-driven necessity has now evolved into a cornerstone of proactive risk management. As IPO-bound companies embrace D&O coverage more than ever, we are witnessing a surge in its value—a direct response to the growing prominence of board accountability and the very real threat of leadership liability in today’s fast-paced, litigious environment.”
