Bharatiya Nyaya Sanhita and Corporate Liability Insurance 2026: How the New Criminal Codes Reshape Director and Officer Exposure

On 1 July 2024 India's criminal-law architecture changed at its foundation. Three statutes came into force replacing the colonial-era trio that had governed Indian criminal justice for over 160 years: the Bharatiya Nyaya Sanhita, 2023 (BNS) replaced the Indian Penal Code, 1860; the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) replaced the Code of Criminal Procedure, 1973; and the Bharatiya Sakshya Adhiniyam, 2023 (BSA) replaced the Indian Evidence Act, 1872. The substantive offences, the procedure for investigation and trial, and the rules of evidence were all rewritten at once.

For a corporate risk manager or a broker placing liability cover, this is not an abstract legal-reform story. Criminal exposure for companies and for the individuals who run them is a core driver of directors and officers (D&O) liability cover, crime and fidelity cover, and legal-expenses cover. When the definitions of offences change, when penalties change, when the procedure for arrest, investigation and attachment of property changes, and when the evidence regime changes, the exposures that those policies respond to shift with them. A liability programme written against the old IPC and CrPC mental model can be subtly out of step with the risks the client now actually faces.

The transition is also genuinely uncertain in places. The codes are new, the body of case law interpreting them is thin and still forming, and several provisions are drafted differently enough from their predecessors that their practical reach will only become clear as courts rule. This post takes a deliberately cautious line where the law is unsettled. The aim is to map, accurately, where corporate and director criminal exposure has moved and what insurance has to respond to, while flagging clearly where the position is subject to interpretation and should be confirmed with criminal-law counsel.

One transitional point matters throughout. Pending investigations and offences alleged to have occurred before 1 July 2024 generally continue under the old IPC and CrPC, while conduct from 1 July 2024 onward is governed by the new codes. For some years to come, a company can face parallel matters under both regimes, and a liability programme must be able to respond to claims arising under either.

The BNS retains most of the conduct the IPC criminalised, but renumbers it, redrafts several provisions, and introduces some new categories. A few areas matter disproportionately for corporate and officer exposure.

Cheating, fraud and breach of trust

The offences a company most often encounters, cheating, criminal breach of trust, forgery and falsification of accounts, carry forward into the BNS in substance, though under new section numbers and with redrafted language. These are the provisions invoked in disputes that turn commercial, where a counterparty, an investor or an agency alleges that a company or its officers obtained property or caused loss by deception or dishonesty. They sit at the heart of the crime/fidelity exposure (employee dishonesty, third-party fraud) and frequently appear alongside civil claims that engage D&O cover. The continuity of these offences means the underlying exposure persists; what changes is the section numbering that policies, particulars of claim and investigation notices will now cite.

Negligence causing death and bodily harm

The BNS rewrites the provisions on causing death by negligence, which are directly relevant to corporates with physical operations, manufacturing, construction, logistics, hospitality, where a workplace fatality or a public-safety incident can lead to criminal proceedings against the company and against named officers. The BNS reorganised the negligence-death provisions and, in a change that drew significant attention, treats certain hit-and-run situations involving negligent driving with notably enhanced punishment. For an organisation running fleets or whose operations expose the public to physical risk, the criminal consequences of a fatal incident, and the personal exposure of officers held responsible, are a live concern that legal-expenses and, where the policy responds, D&O defence-cost cover must be ready for.

Organised crime and economic offences

The BNS introduces an express offence of organised crime, which had not previously sat in the general penal code in that form, and addresses economic offences within that framework. The drafting is broad, and how far it reaches into corporate conduct (as opposed to conventional syndicate crime) is one of the genuinely unsettled questions of the new code; it is subject to interpretation and should be assessed with counsel on the specific facts. For risk managers the point is to be aware that a new and serious offence category exists, that economic-offence allegations against companies can be serious matters carrying heavy penalties, and that the characterisation of conduct as an organised or economic offence can affect both the severity of the proceedings and how a liability policy's exclusions are tested.

Penalties and the shift in emphasis

Across several provisions the BNS recalibrates penalties and, in places, introduces community service as a punishment for minor offences. Penalty changes matter to insurance in a specific way: criminal fines and penalties imposed as punishment are generally not insurable as a matter of public policy, whatever the cover, whereas the cost of defending the proceeding usually is. So a recalibration of penalties does not expand what a policy can pay by way of fines; it changes the stakes of the defence and the personal jeopardy of the officers involved, which is exactly what defence-cost cover exists to address.

The feature of Indian criminal liability that most concerns directors and officers is personal exposure: the prospect that an individual, not just the company, is named as an accused. This did not begin with the BNS, many special statutes (companies, environmental, factories, food-safety, tax and others) already provide for officer liability where an offence is committed by a company, often deeming the person in charge of and responsible to the company for the conduct of its business to be liable unless they prove the offence occurred without their knowledge or that they exercised due diligence. The general criminal code interacts with that special-statute liability, and the move to the BNS does not remove it.

What the new framework changes is the surrounding environment in which that personal exposure plays out. Three dimensions matter.

The first is the seriousness and breadth of the offences that can attach to an individual. With an express organised-crime offence, recalibrated negligence provisions and serious economic-offence treatment, the range of allegations an officer might face, and the gravity of some of them, is, if anything, sharper. A director of a manufacturer facing a fatal-accident investigation, a finance officer facing a fraud or economic-offence allegation, or a senior executive named in a matter characterised as organised crime, all face proceedings where the personal stakes (reputation, liberty, defence cost) are high.

The second is the procedural environment, which the BNSS reshapes (covered in the next section). Arrest, investigation, summons and the handling of accused persons are governed by the new procedure code, and the practical experience of being investigated, the speed, the use of technology, the timelines, differs from the old CrPC in ways that affect when and how an officer needs funded legal representation.

The third is the evidentiary environment under the BSA, which expressly accommodates electronic and digital records as evidence. For corporate matters, where the evidence is overwhelmingly documentary and digital (emails, system logs, financial records, messaging), the formalisation of electronic evidence affects how cases are built and defended, and reinforces why an officer under investigation needs competent, funded defence from an early stage.

The procedural code, the BNSS, is where much of the practical impact on a company under investigation lives, and three procedural themes bear directly on insurance.

Investigation and the timing of defence

The BNSS modernises investigation procedure, with provisions encouraging the use of technology and audio-video recording at various stages and timelines intended to move matters along. From an insurance standpoint, the critical point is that meaningful legal cost is incurred early, at the investigation and pre-charge stage, long before any trial. A company and its officers typically need to instruct counsel as soon as an investigation touches them: to respond to notices, to manage searches and seizures, to protect against self-incrimination, and to engage with the agency. Whether a liability policy funds this early-stage cost, and from what trigger, is one of the most important practical questions in the whole programme. A D&O or legal-expenses policy that only responds once formal charges are framed leaves the company exposed during the very phase where early expert representation most affects the outcome.

Defence-cost advancement

The value of D&O cover in a criminal matter rests heavily on defence-cost advancement: the insurer paying defence costs as they are incurred, rather than only reimbursing after the matter concludes. For an individual officer facing a serious investigation, advancement is what makes the cover useful in real time. Wordings differ on whether and how costs are advanced for criminal investigations, what triggers advancement, and what happens to advanced costs if an exclusion is ultimately found to apply (typically, a right of repayment by the insurer). Under the new codes, with serious offence categories and an investigation phase where cost is front-loaded, the advancement terms are not a technicality; they are the heart of whether the policy does its job. Brokers should read the advancement and the related allocation and repayment provisions carefully against the kinds of criminal exposure the client actually faces.

Attachment, freezing and proceeds of crime

Indian law allows the attachment and freezing of property in connection with serious offences, both through provisions in the procedure code and through specialised statutes dealing with proceeds of crime and economic offences. Where conduct is characterised as an economic or organised offence, the prospect of property attachment and asset-freezing is real, and it has two insurance consequences. First, it raises the stakes and the urgency of the defence, which funded defence cover supports. Second, attachment of an individual's or company's assets is generally not something a liability policy indemnifies (it is not a third-party liability), but the cost of contesting or managing the attachment proceedings can be a covered defence or legal-expense cost depending on the wording. The interaction is nuanced and should be checked against the specific policy and confirmed with counsel.

Every liability policy that touches criminal exposure has to reconcile two things: the genuine need to fund the defence of an individual or company accused of an offence, and the public-policy principle that a person should not profit from, or be indemnified against, their own deliberate wrongdoing. The mechanism that does this is the criminal-acts (or deliberate/dishonest conduct) exclusion, and understanding how it operates is essential when the underlying criminal law has just been rewritten.

The structure of the exclusion

A well-drafted D&O criminal-acts exclusion does not bite merely because an officer is accused of, or being investigated for, a criminal offence. If it did, the cover would be worthless precisely when it is needed, since the whole point is to defend the accused. Instead, the exclusion is typically conduct-based and adjudication-based: it excludes cover for the consequences of deliberate dishonesty, fraud or wilful criminal conduct, but only once that conduct has been established by a final adjudication (a judgment or admission), not merely alleged. Until that point, the policy responds, advancing defence costs, with a right for the insurer to recover advanced costs if the excluded conduct is ultimately established. This structure is what allows the policy to fund the defence of a director accused under the BNS while still honouring the principle that proven deliberate wrongdoing is not indemnified.

The practical implications under the new codes are these. The change from IPC section numbers to BNS section numbers does not, by itself, change how a well-drafted exclusion operates, because good exclusions key off the nature of the conduct (dishonesty, fraud, wilful criminality) rather than off a specific statutory citation. But brokers should still check that the policy's definitions and exclusions are not tied to obsolete IPC references in a way that creates ambiguity, and that the wording holds up against allegations framed under the new offence categories, including the organised-crime and economic-offence provisions whose reach is still being worked out.

Trigger and notification

The trigger that matters most for criminal exposure is when the policy responds: at receipt of a regulatory or criminal investigation notice, at a search or summons, at the framing of charges, or only at a formal claim. Given that cost is front-loaded into the investigation phase under the BNSS, a policy that responds at the investigation/notice stage is materially more useful than one that waits for charges. The notification provisions matter equally: an investigation or a search must usually be notified to insurers within defined timeframes, and a failure to notify a circumstance that later becomes a claim can prejudice cover. Companies should have a clear protocol so that any criminal investigation, search, summons or notice touching the company or its officers is assessed against the notification requirements of the D&O, crime and legal-expenses policies promptly.

Crime/fidelity and legal-expenses interaction

Crime and fidelity cover responds to the company's own loss from employee dishonesty and certain third-party fraud, which engages the BNS offences of breach of trust, cheating and forgery from the victim's side rather than the accused's. Legal-expenses cover, where bought, can fund the cost of defending or pursuing proceedings, including criminal matters, within its terms. The three covers, D&O, crime/fidelity and legal-expenses, overlap and interlock around criminal exposure, and the new codes affect all three. The advisory task is to read them together so that an officer's defence cost, the company's fraud loss, and the cost of contesting proceedings are each addressed by the right cover without gaps or unintended double-counting.

The transition to the new criminal codes is an opportunity for a broker to add real advisory value, because it forces a re-examination of liability cover that many clients have rolled over unchanged for years. Here is the practical agenda.

1. Re-read the D&O criminal-defence and advancement terms. Confirm that the policy advances defence costs for criminal investigations and proceedings, that it responds at the investigation/notice stage rather than only at charge or claim, and that the allocation, advancement and repayment provisions are clear. Given that cost is front-loaded under the BNSS, early-trigger advancement is the single most valuable feature for criminal exposure.

2. Pressure-test the criminal-acts exclusion. Check that the exclusion is conduct-based and keyed to final adjudication of deliberate dishonesty or wilful criminality, not to a mere allegation or to obsolete IPC citations. The exclusion should let the policy defend an accused officer while preserving the principle that proven deliberate wrongdoing is not indemnified.

3. Map the client's real criminal exposures to the codes. A manufacturer with fatal-accident exposure, a financial-services firm with fraud and economic-offence exposure, and a logistics operator with fleet and negligence exposure each face a different profile under the BNS. Match the cover (D&O, crime/fidelity, legal-expenses) to the offences the client could actually face, and identify which exposures are about defending individuals, which about the company's own loss, and which about defending the entity.

4. Be explicit about what cannot be insured. Make sure the client understands that criminal fines, penalties and confiscated proceeds are generally uninsurable, and that the transferable risk is the defence and legal cost. This sets honest expectations and reframes the conversation around defence-cost adequacy and limit, not penalty cover.

5. Put a notification protocol in place. Ensure the client has a clear process so that any criminal investigation, search, summons, or notice touching the company or its officers is promptly assessed against the notification requirements of every relevant policy. A late notification can forfeit cover on an otherwise valid claim.

6. Hedge honestly on the unsettled law. The reach of the new offence categories, particularly organised crime and the economic-offence framework, into corporate conduct is still being worked out by the courts and is subject to interpretation. Advise clients to assess specific exposures with criminal-law counsel rather than relying on a settled reading the case law does not yet provide.

Doing this well requires comparing what each insurer's D&O, crime and legal-expenses wording actually grants, the defence-cost trigger, the advancement mechanism, the precise drafting of the criminal-acts exclusion, the investigation-cost cover, against the client's real exposure under the new codes. That is detailed wording work, not a quote comparison. Sarvada gives commercial insurance brokers and corporate risk teams structured, searchable access to insurer policy wordings and the intelligence around them, so defence-cost triggers, advancement terms and exclusion drafting can be compared across the market and matched to the criminal exposures a client actually faces under the Bharatiya Nyaya Sanhita and its companion codes. Request Access to see how structured wordings intelligence sharpens liability-programme advice in a changed legal environment.