What does Derivative Investigation Coverage mean? Read on to discover the definition & meaning of the term Derivative Investigation Coverage - to help you better understand the language used in insurance policies.
Derivative Investigation Coverage
An insuring agreement (known as "Side D" coverage) found within directors and officers (D&O) liability insurance policy forms. Such coverage pays the costs associated with investigations of an insured corporation, although only those involving shareholder derivative claims. (Derivative claims are brought by one or more stockholders, on behalf of the corporation, alleging financial loss to the organization. Any recovery in such suits inures to the benefit of the corporation itself as opposed to the shareholders who institute the action.) However, investigations may also be required by various regulatory agencies, including the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and others and for which there is no coverage under "Side D" of the policy.
We hope the you have a better understanding of the meaning of Derivative Investigation Coverage.