Three Areas Covered by D&O Insurance
D&O Insurance typically covers three main areas, often referred to as “sides” in the policy:
- Side A: Personal Liability
Protects directors and officers when the company can’t indemnify them (e.g., if the company is bankrupt or legally prohibited from covering costs).
This includes legal fees, settlements and judgements. - Side B: Company Reimbursement
Covers the company when it indemnifies its directors or officers for claims, reimbursing the business for those expenses. - Side C: Entity Coverage
Protects the company itself against certain claims, like securities lawsuits, though this is more common for publicly listed firms.
Common Exclusions
While D&O Insurance can be comprehensive, it doesn’t cover everything.
Exclusions can include:
- Fraud or intentional misconduct
- Criminal fines or penalties
- Claims covered by other policies (e.g., General Liability Insurance)
As an insurance broker, we recommend reviewing your policy carefully to understand its scope and limitations.
A solid D&O Insurance policy can cover your legal expenses and any potential settlement, allowing the leadership team to focus on running the business.
Explore your options with us at Tank Insurance. Contact us today and read our blog for more details.
