Sides “A” And “B” Of Common Directors & Officers (D&O) Insurance

Directors and employers in corporate situations have certain fallback insurances that cover them in the case of either perceived, or unintended losses. This is known as Directors & Officers (D&O) insurance. Losses can be levied as “wrongful acts” by a judicial body in any arena where an employee is involved. D&O insurance applies to intentional and unintentional acts by a corporate body, unless a local jurisdiction has laws against them. Some jurisdictions do not allow expense recovery through D&O claims if a judge determines the losses are caused intentionally.The central idea behind D&O insurance revolves around the concept of wrongful acts, and official capacities. These two ideas help indemnifiers and judicial bodies determine whether any claim is valid, and eligible to fall into a D&O insurance category. If D&O valid coverage is determined, it will fall into one of two main categories.Side “A” D&O InsuranceThis type of insurance usually does not carry an out-of-pocket deductible. It is used to reimburse a directorial and officer staff for all defense and judgments losses regardless of the verdict. Side “B” D&O InsuranceThis insurance protects the company itself from all judgments. This is true even if the acts in question were sanctioned by the company’s directors and officers, or if the directors and officers of a company sustain losses because of the acts of an employee. Side B coverage has become the primary type of D&O insurance because directors and officers often have to personally fund their own defenses, yet must be indemnified as a stipulation of continued attachment to the company.Bouzas Owens, P.A. has years of experience in this practice area and can be of further assistance.