Directors and Officers Liability “Side A” : Important Purchases

Directors and Officers (D&O) liability insurance is a vital component of an organization’s insurance and risk management programs. When recruiting and retaining board members with the expertise needed to “advise and consent” on major business decisions, the proper protection is a necessity.

Side A coverage typically provides an additional dedicated limit of liability to protect the board members’ personal assets. Remember, board members place their personal assets at risk with every contribution made to your company’s success. All parties need to ensure that the valued board members, whether compensated or volunteers, are protected by ample indemnification coverage.

In addition, within a traditional corporate structure, the bylaws should stipulate the availability of D&O coverage, including Side A protection, that indemnifies your board for costs incurred when defending legal actions. Even if your company is financially able to indemnify its board members for monetary expenses they incur, it is usually more cost-effective to pay affordable amounts for this liability coverage, as opposed to self insuring the risk and potentiating facing enormous costs in the future.

Should you have any additional questions or concerns about properly protecting your board members, please contact Chivaroli & Associates Insurance Services.