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entity coverage

Affords direct coverage of the insured organization under a directors and officers (D&O) liability policy. Typically, corporate D&O forms only reimburse the insured organization when it is legally obligated to indemnify corporate officers and directors for their acts on behalf of the organization. However, if a lawsuit specifically names the insured organization as a defendant, the standard D&O policy does not provide coverage. Entity coverage, which until recent years was only provided under D&O policies written for nonprofit organizations and healthcare institutions, is designed to cover the organization directly in addition to its directors and officers. A number of corporate D&O forms will now provide an entity coverage endorsement for an additional premium. See also Allocation.

Links for IRMI Online Subscribers Only: PLI X.E; D&O Typical Policies 3.03


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