The Four Parts of a Traditional Directors & Officers Insurance Policy

Traditionally, there have been four coverage sections on a Directors & Officers insurance policy. These four parts are Nonindemnifiable Claims, Indemnifiable Claims with a Retention, Entity Coverage, and Outside Directorship Liability. 1.   For nonindemnifiable claims, the company cannot indemnify or hold harmless its directors and officers.

2.   Where the company can indemnify after satisfying a retention. The carrier would repay or pay on the behalf of the company the amounts they were obligated to pay.

3.   Entity Coverage covers claims arising out of securities code.

4.   Outside Directorship Liability covers a director or officer when the company a requests that director or officer to sit on another board to further the companies goals. This policy sits on top of the indemnity and insurance of the board on which he serves.

More recently, a fifth part is being added to Directors & Officers insurance policies. This is Part E, International Directorship Coverage.

To learn more contact your agent at Swingle Collins & Associates. Swingle Collins specializes in Directors & Officers insurance for both publicly and privately held companies.