A Look at D&O Insurance in Bankruptcy Proceedings
In this article, published by the American Bankruptcy Institute (ABI) Journal, Waller's John Tishler, Mark Bell and Jeremy Oliver discuss directors and officers (D&O) liability insurance and the role it plays in company bankruptcy proceedings. D&Os may represent an untapped and potentially significant source of funds that can be used to settle creditors' claims in chapter 11 cases.
While D&O insurance policies are neither standard nor uniform, they typically provide three areas of coverage commonly known as the three sides (A, B and C) of D&O insurance.
- Side A coverage reimburses individual D&Os for losses that they personally incur arising from a wrongful act that is not indemnified by the company.
- Side B coverage reimburses the company for its indemnification of losses incurred by its D&Os.
- Side C coverage (a.k.a. entity coverage) indemnifies the company for losses related to defending certain claims against it.
If your company has no D&O insurance or you are concerned that you are not getting the coverage needed in a specific situation, reach out to legal counsel.
For more information, including D&O best practices, read the full article from ABI here.