HSGL director Louise Cable Alexander said, "We are in talks with the GIC subsidiaries for an arrangement wherein we will exclusively design products for Indian managers catering to the needs of local corporates."

According to Alexander, there is a growing need felt by corporates and insurance firms in the country for a sophisticated product to insure unlimited personal liability of directors of a corporate house. "The new companies act has proposed greater accountability on the decision-making of directors and nominee directors. This will encourage corporates to opt for such policies," she said.

In this era of mergers and acquisitions, corporates will not foot the bill in case a suitis filed by a party aggrieved by a wrong decision taken by its directors or any mis-representation of facts and information, Alexander said. The product will be such that a company will "pay the first rupee defence cost in the court of law." "While framing the product we assume that the accused is not guilty unless proved in the court of law," she said.

For providing such a product, HSGL will shortlist a panel of lawyers who will be called upon to provide their services in case a suit is filed against the company availing of the product.

According to Alexander, the premium will vary depending on the size of the corporate, sales and profit figures, number of directors, risk associated and credit rating.

"Corporates will like to hedge the risk arising out of misinformation, misappropriation of funds, disputes arising owing to discord between management and trade union and other defaults by any of its directors," she said.

HSGL's product portfolio in the director-liability segment includes professionalliability, medical malpractice, fraud, computer crime and directors and officers liability insurances. The company specialises in forming strategic relationship with individual clients, purchasing groups, associations, insurance and reinsurance brokers and insurance companies.

According to Alexander, a company is exposed to claims when serving companies having subsidiaries with outside shareholders or involved in joint ventures. "The risk increases when the company publicly raises additional capital, arranges a private placement of debt or equity, acquire new entities, restructure or merge a company," she said.