Boards must understand differences in D&O insurance coverage

The risks exposing corporate boards, especially for public companies, to potential lawsuits continue to increase. As the premiums for directors and officers (D&O) insurance are rising for many companies, it is important to understand the nature of the coverage offered. The type of coverage purchased will affect policy limits available to protect corporate officers.

In her article “Reevaluating your D&O coverage,” Milliman consultant Joy Schwartzman highlights the difference between Side A-only coverage and Side A/B/C coverage and whether the company or the directors are the chief beneficiary of such coverage. She also explains why it’s important for a company and its board to discuss the objective of purchasing D&O insurance and how to maximize the effectiveness of the coverage purchased to meet those objectives.

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