Does D&O Cover Bankruptcy?

Bankruptcy itself is not a request for D&O benefits; the claim must allege a covered wrongful act against an insured person or covered entity. The Travelers specimen includes an organization as a debtor in possession within its definition of insured organization, showing that bankruptcy does not necessarily erase insured status under that form. It also contains exclusions and detailed claim wording that can affect disputes involving a trustee, receiver, or creditor. Check insolvency and bankruptcy exclusions, creditor claims, entity coverage, priority of payments, and whether defense costs share the limit.

Bankruptcy may change who brings a claim and who controls the company, but it does not itself create a covered loss or make unpaid debts insured. A trustee, receiver, or creditor may allege wrongful acts, and an insured-versus-insured exclusion may contain or omit exceptions for those claimants. Side A may matter if the company cannot indemnify an individual; Side B concerns reimbursement when it can. Side C remains limited by its insuring agreement. Check bankruptcy and insolvency clauses, priority of payments, defense-cost erosion, and claim notice. The Travelers specimen includes a debtor-in-possession in its organization definition, but that does not guarantee every bankruptcy-related claim is covered.