One of the critical issues in building a D&O insurance program is the question of how to structure the insurance. Among the more complex issues is how to divide the program between “traditional” D&O insurance coverage and Excess Side A DIC insurance (which in effect provides catastrophic protection for individual directors and officers in certain defined circumstances). A more basic issue is how to “layer” the program between primary and excess insurers, and how much capacity each of these layers should have in the overall program.
The question of how to layer a D&O insurance program is certainly not new, but it remains a vital question and a source of continuing scrutiny and debate, because the way that an insurance program is structured can potentially have a significant impact in the event of a claim.
In the latest issue of InSights, I take a detailed look at the problems and challenges associated with D&O insurance layering and also suggest a few ways these problems and challenges can be reduced, or at least managed. The InSights article can be found here.
Worth Noting: Readers interested in developments regarding the duties of directors outside of the United States will want to take a look at the October 16, 2012 article from Mark Bestwetherick of the Clyde & Co. law firm entitled “Directors’ Duties and the Increasing Requirement for D&O Insurance in the UAE” (here). The article takes a look at pending changes to the UAE company law and the potential impact on the changes to director indemnification and insurance.
The World’s Worst Typos (In Pictures): Read ‘em and weep. Find them here.