American International Group, Inc. (AIG) announced that it is now offering globally up to $100 million in limits for Side A Directors and Officers (D&O) liability insurance.
According to a release, this new capacity from AIG, combined with the insurer's financial strength and claims handling experience, can facilitate the efficient resolution of severe and complex litigation. Companies can now meet their Side A needs by reducing the number of insurance carriers and policy layers necessary for adequate coverage, creating a more efficient D&O insurance structure.
"Too often, settlements are delayed or even increased when customers wait for several insurance carriers to agree on the resolution of a D&O claim," said Michael Smith, President of AIG Global Financial Lines. "AIG is pleased to provide our clients expanded capacity to build one tower to avoid multiple coverage positions from different carriers. This is a clear benefit when resolving a significant claim."
Side A insurance responds when indemnification is not available for individual directors and officers to pay the costs of defending and resolving legal actions against them. This can happen when a company becomes insolvent, wrongfully refuses to indemnify, or is otherwise prohibited from indemnifying directors and officers. Side A coverage can also fill in coverage gaps that may occur in a large D&O program.
A traditionally important aspect of D&O coverage, Side A is seen as critical protection in a challenging economic and regulatory environment, with high rates of bankruptcy filings and corporations withholding indemnification when they suspect an individual has acted in a way that would void such protection.
The expanded $100 million capacity is available in addition to primary Side A limits found in AIG's D&O policies that also cover corporate entities (Side A/B/C policies).
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