Hi,
Scam like Satyam's does not effect Insurance Companies.
In fact insurance is meant for uncertain losses and off-course "financial ones" only.
Insurance companies have various products to cater the Business/Corporate world.
Some of the products are like :
- Directors and Officers Liability Policy,
- Professional Indemnity Policy
- Fidelity Insurance Policy etc. etc.
These products provides financial protection (for the Company, its directors, officers, employees, professional -CA, CS, ICWA) for losses arising out of error and omission, breach of duty, negligence etc. etc. But however any wilful fraud, dishonesty, criminal or malicious act done by and/or on the part of any Company and/or its directors, employees are excluded from the scope of cover.
Further please note, with the increase in number of such scams insurance companies are now scrutinizing ever proposal and fixing higher rate of premium for the covers on industry basis and able to define and /or grid the scope of cover and its exclusions more clearly and specifically.
Hope it is informative for you.
IBS
