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Do ‘Side A’ D&O Policies Still Have Value?

Do Side A D&O policies add value at a time when terms of standard “ABC” policies are getting broader? Mark Paccione of Everest Specialty Underwriters argues that they do, and explains the benefits.

By Mark Paccione | Updated on January 31, 2011

The popularity of Side A D&O policies increased dramatically over the last decade. Fueled in large part by the spectacular demise of numerous large companies during the Enron-era, directors and officers began to better appreciate the importance of high quality insurance coverage for non-indemnified losses.

One of the most attractive selling features of Side A D&O policies has been the extraordinarily broad coverage terms in those policies when compared with standard “ABC” D&O policies, which also covered the company’s D&O indemnification and securities claims exposures. However, in today’s highly competitive D&O insurance market, many of those broad Side A coverage features are now being added to the underlying ABC policies. Examples include covering pre-claim inquiry costs and various fines or penalties, amending the Insured v. Insured exclusion to an Entity v. Insured exclusion, and deleting the pollution exclusion and presumptive indemnification provision.

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