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👔 Executive Liability Actuary • Side A/B/C & Insolvency Shield • 100% In-RAM

Directors & Officers (D&O) & Side A/B/C Modeler

Model executive personal asset exposure, Side A dedicated difference-in-conditions towers, corporate insolvency risk, and shareholder derivative defense.

1. Corporate Structure & Capital Profile Entity Exposure
Total funding, balance sheet equity, or assets
2. Policy Limit, Retention & Side A Architecture Underwriting Layering
Estimated Annual D&O Executive Program Premium
$5,450 / yr
$2M A/B/C + $1M Side A DIC ($3M Total Executive Shield)

For a Series A Venture-Backed Scaleup with $5,000,000 in capital, your estimated annual premium is $5,450/yr. Side A covers personal director assets at $0 deductible if the company faces insolvency, while Sides B & C operate under a $25,000 corporate retention.

Side A Personal Shield $3,000,000 ($0 Ret.)
Side B/C Entity Pool $2,000,000
Corporate Retention $25,000 SIR
Insolvency Protection Dedicated Non-Erodible
Side A / B / C Tower Architecture Layering Breakdown
Side A (Personal) Side B (Corp Reimburse) Side C (Entity)
Board Fiduciary & Insolvency Audit Governance Standards
Model: PLUS Executive Risk & National Venture Capital Association (NVCA) 100% In-RAM

Side A vs. Side B vs. Side C: Executive Protection Matrix

How commercial D&O insuring agreements separate individual director personal wealth from company balance sheets.

Insuring Agreement Insured Beneficiary Deductible / Retention Primary Claim Trigger
Side A (Individual Direct) Individual Directors & Officers $0 (Zero Retention) Company is insolvent or legally barred from indemnifying executives.
Side B (Corporate Reimbursement) The Corporate Entity $10,000 – $100,000 SIR Reimburses the company after it pays to defend board members.
Side C (Entity Securities Defense) The Corporate Entity $10,000 – $100,000 SIR Direct lawsuits naming the company for securities violations or misrepresentation.
Side A DIC (Difference in Conditions) Individual Directors Exclusively $0 (Zero Retention) Dedicated non-erodible layer if Side B/C limit is exhausted by entity legal bills.

The Catastrophic Trap of Shared D&O Limits: How Entity Legal Bills Destroy Board Protection

In private, seed, and growth companies, executives often purchase a standard shared $1,000,000 or $2,000,000 ABC policy. Under this standard structure, all three insuring agreements (Side A, Side B, and Side C) draw from the exact same financial bucket.

If a disgruntled investor, regulator, or creditor sues both the corporate entity (Side C) and the board (Side A/B), the company's defense attorneys may bill hundreds of thousands of dollars per month. By the time the lawsuit reaches trial, the shared limit may be completely exhausted by Side C legal fees, leaving the individual founders and directors personally unprotected with their personal bank accounts, homes, and assets directly on the line.

1. Why Side A Difference in Conditions (DIC) is Essential

A dedicated Side A DIC (Difference in Conditions) endorsement solves the limit erosion trap:

2. Venture Capital & Series A Board Seat Mandates

Almost all tier-1 venture capital funds (NVCA standard agreements) require portfolio companies to maintain a minimum of $1,000,000 to $3,000,000 in D&O coverage with reputable underwriters prior to the formal closing of a priced equity round. This indemnifies the venture partner serving on the startup's board.

⚖️ Errors & Omissions (E&O) Modeler

Calculate professional liability and prior acts with E&O Calculator.

💻 Commercial Cyber Liability Modeler

Calculate ransomware downtime & forensics with Cyber Liability Calculator.

Frequently Asked Questions

Does corporate indemnification in our bylaws eliminate the need for D&O insurance?

No. Corporate indemnification is only as good as the company's bank balance. If the startup runs out of money, enters bankruptcy, or faces a derivative action where state law forbids the company from paying the executive's settlement, corporate indemnification fails completely. Only Side A D&O protects the individual.

What is the Severability Clause in a D&O contract?

A full severability clause ensures that if one director commits intentional fraud or misrepresents financials on the policy application, the insurer cannot void coverage for innocent directors who had no knowledge of the wrongdoing.