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Q: Please explain side A and side B
A: D&O policy basically has 2 core covers:"Side A": Indemnification by Insurer of Director’s loss to the
extent not indemnified by Company.
Side A is a financial protection for Individuals who are insured. It applies without deductible.
This coverage is also called Company reimbursement. It applies after the Company has indemnified its
Directors.
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Q: What is a “claim” under a D&O policy?
A: Generally, a claim includes any written notice or civil proceeding or arbitration, criminal prosecution,
investigation, inquiry or regulatory action alleging a wrongful act by a director or officer in his or her
capacity as a director or officer, seeking monetary or nonmonetary damages.
Q: What is the difference between a policy on a “claims made basis” versus “occurrence basis”?
A: On a “claims made” policy, the claim must be made or reported during the policy period regardless
of when the claim actually happened. On an “occurrence” policy, the claim has to occur during the
policy period, regardless of when a claim is actually made or reported.
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Q: What should I bear in mind during the policy period?
A: For AHA D&O policy, two mains things are:
• to file claim, if any, during the policy period as it is a “claims made” policy
• to inform insurer of “Important Change” namely, change in 75% of the assets, change in 50%
of the voting power, and insolvency matters.
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