Search
 

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 February 07, 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.

This has caused some insureds to question whether separate Side A D&O policies still have value. In fact, Side A policies continue to provide important and valuable insurance protections for directors and officers which cannot be duplicated through ABC policies, including broader coverage terms, limits solely dedicated to non-indemnifiable losses and greater certainty of coverage in the event of a bankruptcy.

BROADER COVERAGE TERMS

Want to continue reading?
Become a Free
PropertyCasualty360 Digital Reader.

INCLUDED IN A DIGITAL MEMBERSHIP:

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

PropertyCasualty360

Join PropertyCasualty360

Don’t miss crucial news and insights you need to make informed decisions for your P&C insurance business. Join PropertyCasualty360.com now!

  • Unlimited access to PropertyCasualty360.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including BenefitsPRO.com, ThinkAdvisor.com and Law.com
  • Exclusive discounts on PropertyCasualty360, National Underwriter, Claims and ALM events

Already have an account? Sign In Now
Join PropertyCasualty360

Copyright © 2024 ALM Global, LLC. All Rights Reserved.