Side A Coverage (D&O)

Side A Coverage pays directors and officers directly when the company cannot indemnify them. This happens in three main situations. First, the company is insolvent and has no funds to pay. Second, the Corporations Act 2001 (Cth) or the company's constitution bans indemnification, such as for certain penalties. Third, the company simply refuses to pay. Side A is the most vital protection for individual directors, because it responds when the corporate shield fails. In Australian insolvencies, liquidators often refuse to indemnify directors, so they can save assets for creditors. This makes Side A vital for personal protection. Some policies offer 'excess' or 'difference in conditions' Side A cover. This adds its own separate limit, sitting above the shared policy limit. The Order of Payments clause usually gives Side A claims priority. This means individuals get paid before company reimbursement claims use up the shared limit.

Side A Coverage pays directors and officers directly when the company cannot indemnify them. This happens in three main situations. First, the company is insolvent and has no funds to pay. Second, the Corporations Act 2001 (Cth) or the company's constitution bans indemnification, such as for certain penalties. Third, the company simply refuses to pay. Side A is the most vital protection for individual directors, because it responds when the corporate shield fails. In Australian insolvencies, liquidators often refuse to indemnify directors, so they can save assets for creditors. This makes Side A vital for personal protection. Some policies offer 'excess' or 'difference in conditions' Side A cover. This adds its own separate limit, sitting above the shared policy limit. The Order of Payments clause usually gives Side A claims priority. This means individuals get paid before company reimbursement claims use up the shared limit.