most D & O policies share a boundary of responsibility between all the political cover lines, including the entity
for example: .. ' ABC has four directors. If they have a D & O liability insurance policy of $ 1 million, they share their limit of $ 1 million among the four directors and officers, as well as the company itself. D & O cover regular entity and individuals personally. In the case of a claim if the four continued the limit of $ 1 million is shared between them.
This can put the company in a position where it is not enough to limit for individual directors and officers. It is important for directors and executives within an organization to be fully informed about the company buys coverage. A deficit of coverage could mean their personal assets are at risk.
This is where "SIDE A DIC 'coverage kicks in. This is a stand-alone policy that provides coverage exclusively for directors and officers (not the entity) when the company can not indemnify (pay .)
for example: if "ABC" bankrupt and the money is there to pay employee salaries, employees could turn around and try to sue the company, including directors and officers. In this case, if "Side A DIC" is up individual directors / managers have more coverage with specific limits.
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