Employee terminations are increasingly emerging as a significant legal and reputational risk for companies in India.

In this instance, a senior manager alleged wrongful termination, discrimination, and lack of due process, resulting in legal action against the company’s directors and HR leadership personally.

The consequences included labour court proceedings, engagement of legal experts, extensive policy reviews, and potential financial exposure ranging from ₹50–70 lakhs.

This highlights the importance of Directors & Officers (D&O) Insurance with an Employment Practices Liability (EPL) extension. Such coverage helps protect organizational leadership against claims arising from employment-related decisions by covering legal defence costs, settlements, and reputational management expenses.