Public sector Oriental Insurance Company may have to cough up around Rs 5 crore under the Directors’ and Officers’ (D&O) liability policy following a claim by expelled Commonwealth Games (CWG) official M Jayachandran.
Jayachandran, who was the treasurer and officer on special duty for revenue and sponsorship, was expelled for alleged irregularities in Queen’s Baton Relay in London. According to media reports, he had approved funds irresponsibly.
The CWG Organising Committee had bought a D&O liability insurance cover of Rs 125 crore to avoid any risk against any legal liability. The committee paid Rs 1 crore for this to Oriental Insurance. D&O policies are reinsured in the international market.
The policy provides protection for claims brought against directors, officers and employees for actual or alleged breach of duty, neglect, misstatements or errors. In addition, the cover takes care of the expenses of defending a legal obligation. It, however, does not pay in case of fraud or other criminal activities.
“The Organising Committee is going to make a claim under the D&O cover. They have intimated it to the brokers. Jayachandran has stated that the Organising Committee sacked him for wrong reasons and has filed for claims under the D&O policy,” said a person familiar with the development.
While Jayachandran was the third official to be expelled after T S Darbari and Sanjay Mohindroo from the CWG Organising Committee, the other two have not filed for any claim under the policy. Though few players got injured during the last ten days of CWG, Oriental Insurance, which provided personal accident and medical emergency covers to all athletes, has not seen any claim.
“They have gone to hospitals themselves and not made any claim,” said a senior company executive.
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In addition to the Rs 5-crore claim under the D&O cover, the insurer will also have to shell out Rs 35-40 lakh for the employees mediclaim policy.
“About 100 employees have claimed under the mediclaim policy,” said the executive.