FAQ
What Triggers Coverage
A wrongful act allegation, formal investigation, or written demand typically triggers D&O coverage. Pre-notice discussions usually do not.
Common Exclusions
Fraud, personal profit, prior-known matters, and bodily injury claims are routinely excluded. Each policy language varies materially.
How Claims Are Reported
Notice must be prompt and written. Side A, B, and C claims follow distinct protocols with different carrier consent requirements.
Policyholder Obligations
Cooperation, no voluntary settlements, and truthful disclosure are core duties. Breach can void coverage entirely.
Understanding What Your D&O Policy Will — and Will Not — Pay
D&O liability insurance is not a single product. It is layered Side A, B, and C coverage responding to different exposures. A securities claim triggers Side C. A personal indemnification deficit activates Side A. Misunderstanding the architecture leads to denied claims at the worst possible time.
Most disputes arise from inadequate notice or late disclosure. Your application is part of the contract. Material misrepresentations can rescind coverage years after inception, regardless of claim merit.
Review Coverage Architecture →Checklist
- ✓Does your policy contain a Side A asset-side provision?
- ✓Are pre-claim inquiry costs covered?
- ○Has the application been audited for inadvertent misrepresentations?
- ✓Do you understand the prior-knowledge exclusion timeline?
- ○Is your notice protocol documented and delegated?
Questions Most Often Asked When a Claim Arrives
Yes, D&O typically covers defense costs, but policies differ. Some erode limits; others pay inside. Hammer clauses, consent provisions, and allocation rules all shape the actual experience once a regulator or plaintiff files.
Settlement without carrier consent is the single fastest path to forfeiting coverage. Even a commercially reasonable resolution can be excluded if it admits fault or exposes the carrier to greater liability than defending through verdict.
Explore Claims Scenarios →Still Have Questions About Your D&O Program?
Speak with a director-level risk specialist about triggers, exclusions, and the obligations that determine whether your policy pays when it matters most.
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