What does Entity Coverage mean? Read on to discover the definition & meaning of the term Entity Coverage - to help you better understand the language used in insurance policies.
Affords direct coverage of the insured organization under a directors and officers (D&O) liability policy. Typically, corporate D&O forms only reimburse the insured organization when it is legally obligated to indemnify corporate officers and directors for their acts on behalf of the organization. However, if a lawsuit specifically names the insured organization as a defendant, the standard D&O policy does not provide coverage. Entity coverage, which until recent years was only provided under D&O policies written for nonprofit organizations and healthcare institutions, is designed to cover the organization directly in addition to its directors and officers. A number of corporate D&O forms will now provide an entity coverage endorsement for an additional premium.
We hope the you have a better understanding of the meaning of Entity Coverage.