The Saudi Central Bank intends to require listed financial institutions under its supervision to provide insurance coverage for board members against professional errors and failures.
The Central Bank’s aim is to achieve the stability and growth of the financial sector, reported Asharq Al-Awsat.
Having such insurance coverage will not exempt board members from their statutory obligations, nor the penalties or violations that may result from violating them
Directors' and officers' (D&O) liability insurance provides financial coverage for executives and board members for them or the company against any fines, lawsuits, or compensation that may arise as a result of their decisions. It covers directors, board members, and the company, in the event that the board of directors fails to comply with regulations, the executive director fails to comply with regulations, or a false statement is published.
Various other insurance products are also available against professional failures and errors, varying according to the insurance target group and scope of coverage. Professional liability insurance protects professionals such as accountants, lawyers, doctors, brokers, asset managers, financial advisors and employees of financial institutions from negligence claims and other claims filed by clients, such as failure to comply with a technical work standard or an incorrect assessment.