D&O insurance protects company officials when corporate indemnification is unavailable, whether due to insolvency or legal prohibition. D&O insurance also provides a mechanism for corporations to be reimbursed when they do indemnify their executives. D&O insurance can also protect the entity itself.
A D&O policy coverage is triggered by a claim for a loss [could be monetary or non-monetary] during the policy period that alleges an insured committed a wrongful act in their capacity as a director or officer and which is not otherwise excluded under the policy.
The policy provides defence and settlement costs also subject to policy terms.D&O Policies are written on a claims made basis, which is a different trigger than the more familiar CGL policy. Unless otherwise restricted, the policy will cover claims made during the policy period, previously unknown to the insured but where the act may have occurred in the past.
The Insurer shall have the right and the duty to defend any Claim made against the Insureds, even if such Claim is groundless, false or fraudulent.