What claims against a corporate entity itself can be covered by a typical D&O policy?
Until recently, a typical D&O policy did not cover corporate liability. Instead, it merely reimbursed the expense the business incurred in indemnifying officers and directors. However, D&O insurers now offer separate entity coverage for securities claims made against the corporation itself. Some broader coverage may also be available for an additional fee. • Should a public company buy D&O insurance? Most large corporations can pay large judgments or settlements even if they are uninsured. However, D&O insurance provides some additional protection. First, it will cover officers and directors for claims that the business will not or cannot indemnify, such as damages in a securities fraud case. Further, companies may dispute if or how much they must indemnify a director or officer, which can cripple a defense until an agreement is reached. This is especially important if a director’s or officer’s interests and the corporation’s are in conflict. Second, the limit on D&O insurance may help
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