Side a Insurance

Executive Indemnity

Unlike other layers of directors and officers policies, this coverage pays directly to the individual without a corporate deductible or co payment. It is triggered during severe events such as corporate insolvency, when the company lacks the funds to cover legal defense costs, or during derivative shareholder actions where local laws prevent corporate indemnification. Having this dedicated protection is essential for attracting experienced board members to guide complex manufacturing or financial operations.

It acts as personal financial security for the leaders who must sign off on risky transitions from development to mass production.

Coverage Trigger

Claims must arise from alleged wrongful acts committed by the directors in their official capacities. The policy triggers only when indemnification by the company is unavailable, either due to financial collapse or legal prohibition. In situations where the corporate entity is insolvent, this policy ensures that defense counsel fees continue to be paid.

Exclusion Boundary

Policies do not cover fraudulent acts, deliberate violations of the law, or personal profit seeking. If a court determines that a director acted with intentional dishonesty, the insurer can deny coverage and claw back advanced legal fees. This moral hazard boundary ensures that the insurance does not subsidize illegal executive behavior.