Directors and officers have begun to question just how much protection they have under their organizations' D&O policies. Their concerns have been prompted in part by litigation in which D&O policies have failed to protect a corporation's executives completely because of the policies' obligations to the corporate entities themselves. No doubt, executives' increased responsibilities under the federal Sarbanes-Oxley Act, recent corporate scandals and well-publicized crackdowns on corporate misbehavior have added to the anxiety.
The D&O market has responded with a variety of products that provide separate or broader coverage for executives. Collectively, these products have been referred to as “Side A” D&O policies.
We reviewed a number of such products available from several leading carriers, primarily ACE, AIG, Chubb, CNA and St. Paul Travelers. (Products also are available from Monitor Liability Managers, Hartford, and Liberty International Underwriters, which we did not review because they had just been issued in late 2004 and thus little information was available about their experience. (Monitor offers a product for both private and publicly owned organizations, which is unusual.)
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