Insurance glossary · Deals and private equity
d&o side a, b and c.
Side A protects directors and officers personally when the company can’t pay for them, Side B reimburses the company when it does, and Side C covers the company’s own securities claims.
What does Side A cover?
Directors and officers personally, when the company can’t or won’t pay for their defense or losses, for example because it’s insolvent or the law doesn’t allow it to indemnify them. It’s the part of the policy that protects individuals’ own assets.
What does Side B cover?
The company, for what it pays to defend or indemnify its directors and officers. When the company steps in to cover its people, Side B reimburses it, usually after a retention.
What does Side C cover?
The company itself, for claims made against the entity. For public companies, it’s usually limited to securities claims. For private companies, it’s typically much broader, covering many lawsuits against the company over management decisions.
What is a Side A DIC policy?
A Side A difference-in-conditions policy covers directors and officers only, above the main D&O policy, and also drops down when the main policy can’t or won’t pay, for example in a bankruptcy or a coverage dispute. It often has fewer exclusions.
Does a private company need D&O coverage?
Private companies face claims from investors, lenders, customers, competitors and regulators, and employment claims are often packaged alongside D&O. Investors and lenders frequently require it, especially at board-level financing.
Is there a retention on each side?
Side A usually has none, since it protects individuals. Sides B and C usually carry a retention the company pays first.
What happens to D&O coverage when the company is sold?
It typically goes into run-off at closing, covering past acts but not new ones, and a tail extends that for former directors and officers. The change in control page covers this.
by type of company.
- Portfolio companiesSponsor-appointed directors often want a Side A layer separate from the company’s shared limit.
- Private equity sponsorsFund-level and portfolio D&O are structured so sponsor representatives on boards are protected in both places.
- Family officesFamily members serving on company or foundation boards rely on Side A when the entity can’t indemnify them.
- Founders and executivesFounders on venture-backed boards should know whether Side C claims could use up the limit meant to protect them.
where you’ll see it.
- Policy declarationsSeparate insuring agreements labeled A, B and C, with retentions for B and C.
- Board materialsQuestions about whether directors have dedicated Side A limits.
- Financing documentsInvestor or lender requirements for D&O coverage at set limits.
protect the people, not just the company.
Riza reviews how your D&O limit is shared across the three sides, models what a large company claim would leave for directors, and adds a separate Side A layer where the board needs it.
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Coverage it touches: D&O and employment practices