A D&O policy is commonly built from three separate sides

The record

A standard directors' and officers' liability insurance program is commonly structured into three parts, described by insurance brokers and reference publishers as Side A, Side B and Side C coverage. Woodruff Sawyer, a brokerage now part of Gallagher, states in its own guidance, Side A Insurance Overview for Directors & Officers, that “the classic form of a D&O insurance policy is a combination of corporate balance sheet protection and protection for directors and officers,” with “three components: Side A, Side B, and Side C, which make up the ABC policy.” The International Risk Management Institute's own entry, Understanding the A, B, and C Sides of D&O Insurance, describes Side A as protecting individuals “when indemnification by the company is not possible,” Side B as “company reimbursement” for indemnification the company does provide, and Side C as “entity coverage” responding to securities claims against the company itself.

What the documents establish

Both documents are industry-published descriptions of common policy architecture, not a statute or standardized form; no government body defines “Side A,” “Side B,” or “Side C” as legal terms of art, and the exact scope varies by the policy language purchased. Woodruff Sawyer's article adds a distinction IRMI does not emphasize as strongly: Side A typically carries no self-insured retention, while Side B and Side C typically carry one, and a company can purchase standalone Side A coverage — sometimes a “difference in condition” policy — reserved exclusively for individuals, separate from the pooled ABC program. Both sources agree Side C, for a public company, generally responds to securities claims and breach-of-fiduciary-duty suits against the entity itself, not general commercial liability.

The operating read

A founder or board member reading a D&O proposal should treat the Side A/B/C framework as a description of what a policy is designed to do, not a guarantee of specific dollar coverage: the amount, exclusions and retentions vary by insurer and negotiated terms, and neither source implies a standard limit. The practical distinction worth carrying into a renewal conversation is between the pooled ABC program, where a single claim can exhaust shared limits before individual directors are protected, and standalone Side A coverage, which exists so individuals retain protection even if entity-level coverage is used up. This is an editorial reading, not advice about how much coverage any company should buy.

What to check before you decide

Before relying on a D&O program's structure, check the following against the actual policy documents.

• Does the policy specify a self-insured retention for Side B and Side C, and does Side A carry none, as is typical?
• Is any standalone Side A coverage a genuine “difference in condition” policy with broader terms, or simply an additional layer with the same exclusions as the primary ABC program?
• What specific claims does the policy's Side C definition cover for this company, given that the scope of “entity coverage” is negotiated rather than fixed by regulation?

Because policy language, not marketing descriptions, controls what is covered in a dispute, the document that matters most is the issued policy itself, read alongside its declarations page and endorsements.