What Does Directors & Officers Insurance Cover?
The coverage provided by directors & officers liability insurance differs among carriers and can be complicated to understand. A member of McSweeney & Ricci’s Commercial division will help simplify the process, get to know your business and offer advice to help select the proper levels of coverage for your specific needs. Below are the 3 components found in a typical D&O policy:
- Side A: Protects the individual directors and officers by paying the defense costs and settlements brought against them, resulting from a lawsuit. Side A pays the individual directors only when the corporation isn’t legally allowed or is unable to.
- Side B: Provides indemnification coverage. Side B reimburses the business for defense costs and damages that the company has paid to (or on behalf of) the directors or officers.
- Side C: Provides corporate liability coverage. Side C pays claims directly brought against the corporation itself. When the business is named along with the individual directors in a lawsuit, Side C helps protect the financial stability of the business.