Also known as: entity coverage · Side C coverage · Side C · entity securities coverage
Entity coverage, also called Side C, is the part of a Directors and Officers policy that protects the company itself rather than its individual directors and officers.
Entity coverage, known as Side C, is the insuring agreement in a Directors and Officers (D&O) policy that responds when the company itself is named in a covered claim, as distinct from Side A, which protects individuals directly, and Side B, which reimburses the company for indemnifying them. In public company D&O, Side C is usually limited to securities claims, such as shareholder suits alleging the company misstated its financial condition. For private companies and startups, entity coverage is often broader and can extend to a wider range of claims brought against the company, though the exact scope depends on the carrier and policy form. Because Side A, Side B, and Side C all draw from the same policy limit, a large entity claim can erode the coverage left to protect individual directors and officers. That shared-limit dynamic is a common reason some boards also buy a standalone Side A DIC policy with its own dedicated limit.
Entity coverage, also called Side C, is the part of a D&O policy that protects the company as an entity when it is named in a covered claim, rather than protecting individual directors and officers. For public companies this typically means securities claims brought by shareholders, while for private companies and startups the coverage is often broader. It works alongside Side A, which pays individuals directly, and Side B, which reimburses the company for indemnifying them.
Entity coverage (Side C) responds when the company itself is the defendant in a covered claim. Side A protects individual directors and officers when the company cannot or will not indemnify them, and Side B reimburses the company for money it spends indemnifying those individuals. All three are insuring agreements within the same D&O policy and share a single policy limit.
Because Side A, Side B, and Side C all draw from the same policy limit, a large entity claim can use up coverage that directors and officers were relying on for personal protection. A standalone Side A DIC policy gives individuals a separate, dedicated limit that entity and securities claims cannot erode, and it can drop down if the main policy will not respond. Later-stage startups often add one as experienced independent and investor directors join the board.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.