This cover indemnifies directors, managers and other officials from actions that the company is not obligated to pay for. A standard Side A policy provides coverage for various liabilities, including damages arising from the actions of your directors and officials. However, the primary coverage limits may be exhausted and will not adequately pay for damages in the event of litigation, leaving directors and officers without protection. If this is the case, an excess Side A limit will help directors and officers cover the extra costs. Here is more on Excess Side A coverage and why you should purchase it.
Additional Compensation Limits
The primary advantage of having an Excess Side A limit is to set aside a limit specifically for directors and officials. When primary insurance coverage is purchased, it features a limit beyond which the insurer will not compensate. For instance, a standard Side A coverage may offer up to $500,000. Should the limit be exhausted the insurer will only pay $500,000 leaving directors and officials vulnerable for additional obligations from litigation. If Excess Side A coverage was selected, additional limits will be available in excess of the $500,000 standard Side A coverage.
Gap Coverage and Asset Protection
Standard insurance coverage may include potentially costly gaps that most people do not realize until they face litigations. While an excess Side A policy will not necessarily extend the scope of coverage, it can help you narrow gaps in your policy. Excess coverage also protects your assets and that of your directors and officials. Insurers have different structures in their policies, so you can elect to increase limits. Not all insurance policies use the same language in their policies. As such, you should examine and understand the policy to determine if coverage gaps exist that you may want covered
Summary
Excess Side A coverage will offer additional limits to cover excess obligations above the primary Side A limits. However, not all policies have the same language and coverage, so you should work with your insurance advisor to find the best policy that meets your needs and business.
