Independent Director Liability
Independent Director Liability, also known as IDL or A-side D&O liability insurance, was designed as excess insurance that sits over traditional D&O insurance protection available to all parties, including the corporate entity. However, the A-side insurance doesn’t cover the corporation, either in its own right or for its indemnification of directors and officers. A-side insurance is dedicated to directors and officers for non indemnifiable loss.
Why is IDL coverage purchased?
In the asset manager world, IDL insurance can be used for a variety of purposes:
- If the asset manager does not carry its own E&O/D&O insurance, IDL coverage can be purchased to satisfy the requirements of independent directors hired to serve on the boards of offshore funds;
- To build a separate “tower” of insurance by giving individual directors and officers their own dedicated set of limits in the event the main corporate D&O limits become exhausted. This is typically purchased only by larger asset managers with large insurance limits and AUM’s.