The Internet has completely revolutionized how business is transacted worldwide, but it has also introduced lurking dangers for the SME (Small and Medium Enterprises). Hacking, malware, cyber attacks, database disclosures, and viruses have been making life quite difficult for businesses to survive in an already fiercely combative environment. Highly placed officials in particularly small businesses are always liable in major Cities like Singapore, and having d&o insurance small business (“d&o” means “directors and officers”) is absolutely essential for individual office-holders to survive such cases against themselves.
The main areas of coverage for d&o insurance small business are as follows:
- Coverage for the Company proper: When sued as an active member of the company, the company mandatorily pays for the legal costs, fees and damages. The insurance policy in turn compensates the company for these expenses.
- Personal Liability Cover: The SME’s often do not indemnify their retired Directors’ and Officers’ personal effects from seizure by judicial and statutory authorities in the case of losses suffered by the company from external factors, even cases of hacking. Personal assets such as house, car, furniture, domestic equipment and so on are all on the seizure list if the court so desires. This is particularly true of such cases in Singapore, where personal responsibility of the top officials of the company for disasters are held to be sacrosanct and mandatory.
- Entity Securities: This applies only for publicly-listed companies trading stock market shares in the future. Typically, cases by unhappy shareholders over IPO issues, are covered.