What Is D&O Insurance?

Directors and officers (D&O) liability insurance is designed for management-related claims against people serving an organization and, depending on the form, the organization itself. Covered loss may include defense costs, settlements, or judgments, but the wording controls what counts as a claim, insured person, wrongful act, and loss. The Insurance Information Institute describes Side A, Side B, and Side C as distinct parts that may appear in a policy. Check the declarations and insuring agreements to see which protections were purchased, whose conduct is insured, and whether defense expenses erode the limit.

The A/B/C labels help explain who receives payment: Side A protects an individual when the organization does not indemnify them, Side B reimburses the organization for indemnification, and Side C may cover the organization for defined claims. Some forms include only certain grants, and Side C can be narrow. Conduct, prior-acts, and insured-versus-insured exclusions may also limit a claim. Compare the insuring agreements, defined loss, covered entities, retention, and shared-limit language in the quote.