Such coverage pays the costs associated with investigations of an insured corporation, although only those involving shareholder derivative claims. (Derivative claims are brought by one or more stockholders, on behalf of the corporation, alleging financial loss to the organization. Any recovery in such suits inures to the benefit of the corporation itself as opposed to the shareholders who institute the action.) However, investigations may also be required by various regulatory agencies, including the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and others and for which there is no coverage under "Side D" of the policy.

As part of an investigation, insureds must usually hire outside counsel, as well as various accounting, financial, and regulatory experts. Such parties assist the organization in managing document requests, responding to interrogatories, and providing depositions.

There are three specific drawbacks associated with the investigations coverage contained within "Side D" of a D&O liability policy. First, coverage is limited to shareholder derivative demand investigations only. Second, the vast majority of insurers write Side D coverage with merely a $250,000 sublimit, a figure that is generally inadequate given the speed with which investigation-related costs can accrue. Lastly, virtually no excess D&O insurers will agree to provide "drop down" coverage once the $250,000 sublimit under "Side D" is exhausted. For example, assume an insured expends $1.25 million in investigations expense in conjunction with a derivative claim brought against it. In this situation, its excess insurer will not cover the $1 million that will not be indemnified by the insured's primary D&O insurer.