“Although, at present, India as a country is still awaiting comprehensive legal guidelines with respect to corporate risk and compliance management, in recent times, compliance with labour, industrial, financial and corporate laws has gathered enormous momentum within the corporate sector” – More on this can be accessed from the article “Liability for risk and compliance management in India” by ALMT Legal-Advocates & Solicitors. Link given below.
What about the legal expenses – Are they on the rise? Yes. While the article “India Inc spent 14% more on legal fees in FY19” ( link given below) talks about the listed companies, it does signal a message.
And look at some provisions of THE OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2019.
“Penalty for contravention of provisions of duties relating to safety provisions resulting in an accident:
96. (1) If a person fails to comply with or contravenes any duties under this Code or the rules, regulations, or bye-laws or orders made thereunder and such non-compliance or contravention has resulted in an accident or dangerous occurrences causing,— (a) death, he shall be punishable with an imprisonment for a term which may extend to two years or with a fine which shall not be less than five lakh rupees or with both; or (b) serious bodily injury to any person within the establishment, he shall be punishable with an imprisonment for a term which may extend to one year or with a fine which shall not be less than two lakh rupees but not exceeding four lakh rupees or both: Provided that while imposing the fine under this section, the court may direct that a portion of the fine, which shall not be less than fifty per cent. thereof, shall be given as compensation to the victim or to the legal heirs of the victim, in the case of his death.”
Because of the changes in the legal landscape, the need for liability insurance is getting accentuated with every passing day. It is necessary for all associated with it – providers, intermediaries, advisers and end users – to continuously keep track of the changing environment. It helps in putting in place proper risk management practices and measure the insurance protection in terms of quality and quantum
Does insurance policy pay for all kinds of legal exposures? The answer is a clear NO. But, with regard to insurable exposures, it may help mitigate the impact, when defence is needed.
Finally, while buying insurance coverage, one needs to read the entire insurance policy to understand the coverage and exclusions. Please read the article “Court Does Not Pity the Fool Who Does Not Fully Read His Insurance Policy”( Link given below).
As with any other financial service, informed buying and informed selling – both are important.