What is Rescission?
The term "Indemnification" may refer to the legal protection of a person or organization against claims or losses that arise as a result of the actions of another. In the context of D&O insurance, indemnification is the contractual obligation of the insurer to make payments to the insured or their legal representatives in the event of a claim.
Rescission in More Detail
Indemnification is a key component of D&O insurance, which is intended to protect directors and officers of organizations against legal claims made against them by third parties. It provides coverage for any damages or legal costs incurred as a result of alleged wrongful acts, errors, omissions, or other wrongful conduct of the insured.
The indemnification clause of a D&O insurance policy typically specifies the maximum amount of money the insurer is liable for should a legal claim be made against the insured. The indemnification clause may also include terms that provide the insured with access to legal representation in the event of a claim.
In the event of a claim, the insurer will typically conduct an independent investigation into the matter to determine if there is valid cause for indemnification. If so, the insurer will then make a payment to the insured or their legal representatives to cover the costs associated with the claim.
Indemnification is an important part of a D&O insurance policy, and is designed to offer legal protection to directors and officers of organizations. It ensures that the insured is not held financially responsible for any losses resulting from the actions of another.
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