Part II moves beyond public, products and employers' liability to the specialist financial and contingency covers: directors' and officers' (D&O) liability, professional indemnity in depth, cyber, product recall and guarantee, environmental impairment, employment practices liability, and contingency covers such as event cancellation, non-appearance, adverse weather and prize indemnity. The exam tests who and what each cover protects, the claims-made mechanics, the Singapore law points that shape D&O and cyber cover, and the exclusions that stop one policy absorbing every loss.
6 sections·~4 min read
✓Checked against the SCI ComGI syllabus chapter 4; Companies Act 1967 s.172, s.172A, s.172B and Personal Data Protection Act 2012 s.26B, s.26C, s.26D (sso.agc.gov.sg); PDPC data breach guidance; CSA advisories AD-2020-008 and AD-2022-003; standard specialist liability and contingency wordings, checked 13 Sep 2026. Unofficial prep, not endorsed by MAS or SCI.
★
Must-know for the exam
✓Companies Act 1967 s.172(2): a company provision indemnifying an officer against liability for negligence, default, breach of duty or breach of trust in relation to the company is void, except as permitted by s.172A or s.172B.
✓s.172A: the company may buy and maintain insurance for an officer against that liability, which is the legal basis for company-paid D&O cover.
✓s.172B: third-party indemnities are allowed, but not for criminal fines, regulatory penalties, or defence costs where the officer is convicted or loses civil proceedings brought by the company.
✓D&O insuring clauses: Side A (directors, when the company does not indemnify), Side B (reimburses the company), Side C (entity cover, usually securities claims). Claims-made, shared aggregate limit, conduct exclusions applied after final adjudication.
✓PI mechanics beyond Part I: civil liability versus negligence-only wordings, aggregation of related claims, hammer (consent-to-settle) clauses, notification of circumstances, run-off.
✓PDPA s.26B: a breach is notifiable if it is likely to cause significant harm or is of significant scale (500 or more individuals per PDPC); a breach only within the organisation is deemed not notifiable.
✓PDPA s.26D: notify the PDPC as soon as practicable and no later than 3 calendar days after assessing the breach as notifiable (assessed 1 July, notify by 4 July).
✓Cyber: first-party (forensics, notification, restoration, extortion, business interruption after a waiting period) and third-party (privacy and network security liability). Exclusions include infrastructure failure, war and betterment.
✓Product recall covers the insured's recall costs; product liability covers injury and damage to others; product guarantee covers repairing or replacing the product itself.
✓Contingency covers pay financial loss when a specified uncertain event occurs: event cancellation (not poor ticket sales), non-appearance, parametric adverse weather (basis risk) and prize indemnity (conditions strictly applied).
Why this chapter matters
•These covers answer financial and reputational exposures that general liability policies exclude. Questions usually give a scenario and ask which policy responds, or why a policy does not. Know the boundary of each cover and the Singapore statutes that shape D&O and cyber claims.
•Takeaway: bodily injury and property damage belong to Part I covers; financial loss, data and contingencies belong here.
Directors' and officers' liability
•D&O protects directors and officers personally against claims alleging wrongful acts in their roles, including defence costs. Under Companies Act s.172(2), a company cannot validly indemnify an officer against liability to the company for negligence, default, breach of duty or breach of trust, but s.172A expressly allows the company to buy insurance for that liability. Section 172B allows certain indemnities against liability to third parties, excluding criminal fines, regulatory penalties and specified defence costs.
•Side A: pays insured persons directly when the company cannot or does not indemnify them (insolvency, legal prohibition).
•Side B: reimburses the company for indemnities it has lawfully paid.
•Side C: covers the company itself, usually for securities claims.
•Extras: investigation costs, outside directorship liability (in excess of the outside entity's cover), run-off after a change of control, Side A difference-in-conditions policies that can drop down.
•Mechanics: claims-made; prior and pending litigation excluded; one aggregate limit shared by all insured persons, eroded by defence costs; severability so one director's non-disclosure does not taint others; fraud and personal profit exclusions applied once established by final adjudication, with advanced costs repayable.
CMFASPrep