D&O insurance is designed to protect anyone serving as a director or officer for your company or organization from personal losses due to claims alleging they’ve deviated from their duties. Directors and officers insurance may be purchased as a separate policy or bundled in with other forms of liability insurance. It can include one or more different types of coverage: A-side coverage, B-side coverage, or C-side coverage.
A-side coverage covers the officers, directors, and even employees for legal costs if a company cannot indemnify them – such as in the event of bankruptcy.
B-side coverage covers the company’s officers’, directors’, and employees’ losses if a company does indemnify them.
Finally, C-side coverage, which is also referred to as “entity coverage,” financially protects a company. This coverage, however, may reduce the limits that are available for protecting individual directors and officers.