Also known as: Side A DIC · Side A difference in conditions · standalone Side A · Side A DIC coverage
Side A DIC is a standalone D&O policy dedicated to protecting individual directors and officers, with its own limit that drops down when the underlying D&O program will not or cannot pay.
A Side A DIC policy is a separate D&O insurance policy that sits above and around your primary D&O program and exists solely to protect individual directors and officers, never the company itself. It does two jobs. First, it "drops down" to pay a covered claim when the underlying D&O policy will not respond, such as when a carrier rescinds the policy, an exclusion blocks the claim, or the company is unable or unwilling to indemnify. Second, it provides an extra dedicated limit that only individuals can access, so entity claims or securities suits against the company cannot exhaust it. This is different from plain Side A, which is an insuring agreement built into the main D&O policy and shares that policy's single limit; a Side A DIC is its own policy with its own limit and typically broader terms.
Side A DIC is a standalone D&O policy that protects only individual directors and officers, not the company. It sits above and around the primary D&O program and "drops down" to pay when the underlying policy will not respond, for example after a rescission, when an exclusion applies, or when the company cannot or will not indemnify. It also adds a separate limit that entity and securities claims cannot use up, keeping it available for the individuals it is meant to protect.
Regular Side A is an insuring agreement inside your main D&O policy, so it shares that policy's single limit and follows its terms and exclusions. A Side A DIC is a separate policy with its own dedicated limit and usually broader terms, and it fills the gaps (the "difference in conditions") where the underlying coverage refuses to pay. In short, one is a feature of the main policy and the other is a standalone backstop that only individuals can access.
Not every early-stage startup needs one, but it becomes more valuable as you add independent or investor board members and raise larger rounds. Experienced directors often ask for a Side A DIC because it gives them protection that cannot be eroded by claims against the company. Many startups add it once their D&O program and board have grown more sophisticated.
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.