The Three Sides of Directors and Officers Insurance

The Three Sides of Directors and Officers Insurance

Many insurance coverage plans are complicated and somewhat difficult to understand. This very trait can sometimes allow the coverage to be as comprehensive as possible, taking into account many different types of liability. One key example to illustrate this point is Directors and Officers insurance. This insurance has three sides: side A, B and C.

Side A

Side A coverage applies when the directors and officers of a company are not indemnified by the company, and are sued. This side of the coverage takes into account and protects each director and officer’s personal assets, so that these individuals do not bear the financial burden of certain suits directed at them.

Side B

Side B coverage, on the other hand, comes into play when the company does indemnify or compensate their directors and officers in the event of these suits. In this case, the Directors and Officers insurance coverage can compensate the company itself for the suit, rather than compensating individual executive officers.

Side C

Finally, there is side C coverage. Side C coverage responds to the circumstance in which the company itself has a claim brought against it. This component of the insurance helps to make sure that the company is compensated for these financial losses.

Overall, sides A, B and C each provide coverage for different circumstances. When the three are combined together under a single insurance plan, they can jointly constitute truly comprehensive Directors and Officers insurance coverage.