MLIS Exam Questions & Answers 2024/2025
Side A Coverage - ANSWERSCovers directors and officers when the corporation does not indemnify. Liability Coverage or personal assets protection.
No retention
Side B Coverage - ANSWERSCovers the corporations obligation to indemnify directors and off...
Side A Coverage - ANSWERSCovers directors and officers when the corporation does not indemnify.
Liability Coverage or personal assets protection.
No retention
Side B Coverage - ANSWERSCovers the corporations obligation to indemnify directors and officers -
balance sheet protection/corporate reimbursement coverage. .
Largest retention
Side C Coverage - ANSWERSEntity Securites Coverage - Covers the corporation as a defendent in litigation
involving securities issued by the organization
Largest retention
Side D Coverage - ANSWERSDerivative Investigation Covergae - Pays the cost of investigations that are
required when a derivative claim is made against the insured corporation.
No retention - usually subject to a $250,000 sublimit
Side A coverage applies in which 3 situations? - ANSWERS1. Parent organization is not legally required or
able to indemnify directors and officers for a specific claim
2. when defendant directors and officers must pay a settlement or judegement in a shareholder
derivative lasuit
3. when the company lack the financial capacity to indemnify its directors and offcers
(bankrupcy/insolvency)
Side A only (DIC) policies are intended to cover which 2 scenarios? - ANSWERS1. Provides excess limits in
the event the limits under the primary form are exhausted by claim payments and defense costs.
2. Drops down over primary forms in the event that an exclusion or other restriction applies under the
primary form.
, In the case of a bankruptcy, can a trustee who "stands in the shoes" of a corporate entity access the Side
A only (DIC) policy proceeds? - ANSWERSNo, because the corporate organization is not covered under
Side A forms.
Will Side A only (DIC) coverage apply to severable warranties, or when the CFO or CEO intentionally lies
on a D&O application? - ANSWERSYes
Are financial ststatememts covered in a Side a only (DIC) policy? - ANSWERSYes, but they would not be
covered in a traditional D&O policy.
Side A-only (DIC) forms cannot be recinded based on fraud committed by any insured under the policy?
(T/F) - ANSWERSTrue - for any d& that did not commit the fraud
If a lawsuit names only the parent organization and not the collective or individual directors and officers,
which Coverage Part will apply? - ANSWERSSide C only
Gamma Corporation's directors and officers policy provides Side A and Side B coverage but not Side C or
Side D coverage. Allegations clearly covered by the policy are involved in a claim that names individual
board members and Gamma Corporation itself as defendants. Under these circumstances:
a. coverage will be available for the corporation but not for the individual board members.
b. the insurer will deny the claim.
c. the insurer will pay the claim in full.
d. coverage will be available for the individual board members but not for the corporation. - ANSWERSd.
coverage will be available for the individual board members but not for the corporation.
Because she committed a particular wrongful act in her role as an officer of Theta Co., Amy is required to
pay damages to a third party. Theta's directors and officers (D&O) policy includes coverage under Sides
A, B, C, and D. However, under applicable state law, Theta Co. cannot indemnify Amy for her loss. Under
these circumstances, Amy might:
a. need to absorb a large retention.
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