Directors and Officers Insurance Side A Coverage: Explained and Overview

Directors and Officers (D&O) insurance is essential for protecting the personal assets of company directors and officers in the event of a lawsuit or other legal action. One important aspect of D&O insurance is Side A coverage, which provides a crucial layer of protection for individuals when the company is unable to indemnify them. In this post, we will provide an overview of what Side A coverage is, how it works, and why it is important for directors and officers.

What is D&O insurance?

D&O insurance is a type of liability insurance that provides financial protection for the personal assets of company directors and officers in the event they are sued for alleged wrongful acts in their capacity as leaders of the organization. This coverage is crucial in today’s litigious business environment, where executives and board members can be held personally liable for decisions made on behalf of the company.

D&O insurance in practice

In practice, D&O insurance can provide coverage for legal defense costs, settlements, and judgments resulting from lawsuits and other legal actions. It is designed to protect the personal assets of directors and officers, as well as the financial stability of the company itself.

What do common D&O risk scenarios include or exclude?


Common D&O risk scenarios include:

Common D&O risk scenarios include allegations of breach of fiduciary duty, negligence, misleading statements, conflicts of interest, and other misconduct related to corporate governance.

Common D&O exclusions include:

Common D&O exclusions may include fraudulent or criminal acts, profits from personal services, and matters uninsurable under the law.

D&O insurance structure

D&O insurance typically consists of three main coverage parts: Side A, Side B, and Side C. Side A coverage, in particular, is focused on protecting the personal assets of directors and officers when the company is unable to provide indemnification.

How D&O works: excess layer structures

Excess layer structures provide additional layers of protection beyond the primary D&O coverage, allowing for higher limits of protection in the event of catastrophic lawsuits or legal actions.

International programs


Who is covered?

International D&O programs can cover directors and officers of multinational companies operating in various countries around the world.

What is covered?

International D&O programs can provide coverage for legal defense costs, settlements, and judgments related to global legal actions and regulatory investigations.

Who can claim?

Claims may be made by directors, officers, or the company itself in the event of a covered loss or legal action.

Six steps to structuring an insurance program

When structuring a D&O insurance program, it is important to consider the specific needs and risks of the company, as well as the potential exposures faced by its directors and officers. This may include an assessment of corporate governance practices, regulatory requirements, and industry-specific risks.

Allianz Risk Barometer


Top 3 business risks in Professional Services in 2023

“According to the Allianz Risk Barometer, the top 3 business risks in Professional Services in 2023 include regulatory and legislative changes, cyber incidents, and business interruption.” – Allianz

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