Early signs of trouble at American International Group–which drove the holding company to near bankruptcy this month–were behind the design of at least one type of D&O coverage response, long before A.M. Best dropped ratings of AIG’s property-casualty subsidiaries to “A” from “A-plus.”

Peter Taffae, managing director of Los Angeles-based wholesaler, Executive Perils, crafted a contingency plan that he refers to as a “supercontinuity option” 90 days ago. Initially the plan was put in place for Southwest Airlines, and then for four other buyers of directors and officers liability insurance in a three-month timeframe, he said.

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