Directors and Officers Liability insurance is a liability insurance covering Directors and Officers of your company from claims made against them when they are serving on a company’s Board of Directors or as an officer. A typical D&O policy provides three standard forms of protection as per the insuring agreements—Side A, Side B and Side C.
SIDE A: DIRECTORS AND OFFICERS COVERAGE
Side A insures individual directors and officers against losses that the organization is not legally or financially able to indemnify. This coverage protects the personal assets of directors and officers in the event a company does not take up the indemnification.
SIDE B: CORPORATE REIMBURSEMENT COVERAGE
Side B reimburses organizations for expenses they incur when defending directors and officers in accordance with their indemnification obligations.
SIDE C: ENTITY COVERAGE
Side C coverage insures organizations for claims made directly against the organization by providing entity asset protections and coverage for defense costs. Side C coverage is often limited to securities claims.
SIDE A – DIFFERENCE-IN-CONDITIONS (DIC)
Unlike standard Side A agreements, Side A DIC sits on top of a traditional D&O policy, providing a broader coverage with separate limits for directors and officers. This fills the following gaps:
- Side A DIC coverage provides excess insurance that kicks in once a company’s traditional D&O policy is exhausted.
- Side A DIC coverage provides protection when an underlying insurer fails or refuses to pay, attempts to rescind coverage or becomes insolvent.
With these gaps addressed, Side A DIC coverage acts as a safety net that can help companies with comprehensive risk mitigation.
Get in touch with PlanCover, a highly reputed insurance broker serving a wide range of businesses in the Indian market, to buy suitable insurance policies that practically benefit your company.
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