By Mihir Mishra and P R Sanjai Tata Sons and Tata Trusts are in talks with insurance companies about coverage for potential claims resulting from a corporate power struggle, said people familiar with the matter, signaling both sides are assessing the fallout of their battle to control the $185 billion Indian conglomerate.

Key executives at Tata Sons, the group’s holding company, and the charities that own 66% of it — collectively known as Tata Trusts — are seeking clarity on the extent of legal expenses coverage under directors and officers liability policies if their dispute ends up in court, these people said, who did not want to be identified since the consultations are private.

The discussions include possible claims that may arise from smaller shareholders seeking compensation for losses suffered due to the boardroom showdown or from any regulatory action, they added. Tata AIG General Insurance Company Ltd. has written these policies for both the stakeholders, the people said.

The acrimony between Tata Sons’s board and its largest shareholder, the Tata Trusts, burst into the open after a stormy Sept. 17 meeting about the group’s future direction. Noel Tata, who heads Tata Trusts, opposed pursuing a listing for the holding company and the reappointment of Natarajan Chandrasekaran as chairman for another five years. But he was overruled by other Tata Sons board directors, creating a divide in the leadership that has only hardened in the weeks since that decision.

Companies typically buy directors and officers liability insurance to protect senior staff from personal losses if they are sued as a result of work done as employees. It can also cover the legal fees and other costs the organization may incur as a result of such a suit.

The Tata policies include provisions allowing them to file claims against one another for valuation losses, one of the people said. But no such claims have been filed so far, they said. Representatives for both Tata Sons, Tata Trusts and Tata AIG didn’t respond to a request for comment.

The Tata Sons board is keen to pursue a public listing in line with the Indian banking regulator’s guidance for any systemically important shadow lender, which would include the holding company as currently structured. But Noel Tata has argued that going public would dilute the Trusts’ philanthropic mission, expose the group to market volatility and compromise a century-old governance model. Tata Trusts has called the Tata Sons board’s reappointment of Chandrasekaran an “illegal” move. While neither side has filed suit against the other in court, both sides have lawyered up with top-notch attorneys.

If legal action does ensue, it wouldn’t be the first time the Tata Group drew on its insurance coverage to pay legal fees: It did so after Cyrus Mistry was removed as executive chairman of Tata Sons in October 2016. The Mistry family and Shapoorji Pallonji Group, which holds about 18.4% of Tata Sons, challenged the removal.

The case eventually reached the Supreme Court, which in March 2021 ruled in favor of Tata Sons. While Tata Sons and Tata Trusts have not spoken about the legal fees during the Mistry legal wrangle — they were both on the same side then, a Times of India report pegged the expense at 2 billion rupees ($21.2 million).