Glossary

Side A-only coverage refers to a directors and officers (D&O) liability policy that provides only "direct" coverage of the directors and officers but does not cover the corporation's legal obligation to indemnify the directors and officers (known as Side B or corporate reimbursement coverage). Side A-only forms are written either on an excess or umbrella basis over a primary D&O policy. When written on an excess basis, they provide additional limits if a claim exhausts the coverage available under the primary form. When written on an umbrella basis, Side A-only policies afford broader coverage than the underlying, primary D&O policy as well as additional limits.

A series business unit (SBU) is a self-governing and protected company formed under the umbrella of a series limited liability company, currently permitted in Delaware. The SBU is an independent insurance company capable of issuing policies directly or policies fronted by a commercial insurer to the insured company and third parties. Each SBU has a unique business purpose and an independent tax identification number. The SBU's business purpose, taxpayer election, and coverage offerings are specified. Unlike the protected cells or segregated accounts of rent-a-captives, SBUs have greater flexibility offered by self-governance. An SBU is protected from the financial obligations of other SBUs by Delaware statute.