Confirming that robust Side A difference in conditions (DIC) coverage is in place gives executives direct access to insurance protection without reliance on company indemnification.

The insured vs. insured (or entity vs. insured) exclusion should be properly worded to carve out claims brought by bankruptcy trustees or debtors-in-possession, to help ensure that coverage is not excluded for these types of claims.

Policies should contain provisions that waive the bankruptcy automatic stay, allowing individuals timely access to insurance proceeds for defense costs and settlements.

Companies should assess whether existing D&O limits are sufficient given their risk profiles and potential exposures. If current limits have already been eroded — or have the potential to be eroded — by prior claims, securing additional limits may be critical to ensuring ongoing protection.

Amend policy to be cancelable only for nonpayment of premium. D&O policies are generally noncancelable by the insurer, except in cases of nonpayment of premium, but the company can still choose to cancel the policy.

D&O policies should have a clear priority of payments provision, ensuring that Side A losses are paid first to protect individual directors and officers before corporate entity coverage is triggered.

Properly structuring the D&O insurance program is essential to address and coordinate coverage for pre- and post-petition acts. Companies often seek to ring-fence pre-petition liabilities, requiring careful coordination between the run-off or tail policy, debtor-in possession policy, and go-forward policy upon emergence.

This involves structuring or amending a D&O insurance program to explicitly include a provision that ensures coverage remains in effect even if the insured entity or individual is financially insolvent and unable to pay. To achieve this, the policy should include clear language with a clause stating that indemnification applies to any claims or losses arising during periods of financial insolvency or inability to pay.