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Tata AIG General Insurance Company has issued policies to both sides, the report said. These policies allow for claims against each other for valuation losses, although no such claims have been filed so far.
The conflict escalated after a contentious meeting on September 17 regarding the group's future. Noel Tata, chairman of Tata Trusts, opposed a public listing of Tata Sons and the reappointment of Natarajan Chandrasekaran as chairman for another five years. Other directors overruled him, deepening the divide.
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The Tata Sons board supports a listing in line with the Reserve Bank of India's guidance for systemically important shadow lenders. Noel Tata argued that a listing could dilute the Trusts' philanthropic mission, expose the group to market volatility, and undermine its governance model. Tata Trusts has called Chandrasekaran's reappointment "illegal".
Neither side has filed a lawsuit, but both have engaged lawyers, the report stated. Directors and officers liability insurance typically protects senior executives against personal losses from work-related lawsuits and can cover an organisation's legal expenses.
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The group had previously used insurance coverage for legal costs. After Cyrus Mistry was removed as Tata Sons chairman in October 2016, his family and the Shapoorji Pallonji Group, which holds about 18.4% of Tata Sons, challenged the decision. The Supreme Court ruled in Tata Sons' favour in March 2021.