Insurance cover for insolvency professionals

ICICI Lombard, HDFC Ergo, New India Assurance and National Insurance are among the insurers planning a tailored insurance cover for insolvency professionals as the new breed of executives stare at multiple risks from charges of sabotage to negligence. “As of now, the normal professional indemnity cover can protect them,” said Sanjay Datta, chief underwriting and claims, at ICICI Lombard. “Later on as market need increases we can develop a specialized cover for them.” Resolution of default cases under the new Insolvency and Bankruptcy Code is gathering momentum. Section 233 of IBC gives protection to insolvency professionals for any action taken in good faith. “However, the onus to prove innocence will be on the insolvency professional, which at times may be difficult, time consuming and expensive. As such the professional indemnity insurance becomes vital and no professional should start without being insured,” said Subodh Kumar Agarwal, insolvency professional. State-run insurers are also turning active. “We will surely be interested in providing cover. First, we need to understand the nuances of the product because to design the product we need to understand the responsibilities and liabilities the IP will have,” said G Srinivasan, managing director of New India Assurance. “There is an emerging breed insolvency professional who are looking at indemnity cover and that is an opportunity for us,” said K Sanath Kumar, MD of National Insurance.