This is the result of the fact that the perceived necessity of such liability insurance is of relatively recent vintage, and that insurers have been responding to both the changing business climates and the regulatory schemes imposing liability on directors and officers over the past three decades. One potential benefit of the absence of a standardized policy form is that an insured may be able to negotiate various provisions of the policy. Those who become directors or officers during the policy period are typically covered, and the policy may cover previous directors and officers. It is wise to have these positions specifically stated in the declarations page or an endorsement to the policy. This usually requires that the innocent insured have no knowledge of the fraud or dishonesty.
Some policies exclude claims for acts occurring after a subsidiary ceases being a subsidiary.
Some policies offer coverage for directors and officers who serve as directors of other companies, which are not subsidiaries or otherwise affiliated with the corporation. Most policies, however, exclude coverage for acts undertaken as an outside director. Compare MGIC Indem. Home State Sav. The retention may be applied to initial defense costs, but depending on the language of the policy, defense costs in excess of the retention may be included in the limits of liability.