D&O is not one cover but several parts. Side A protects the officer personally when the company does not pay or is not permitted to. That is not only the insolvency scenario: if the claimant is the company itself, it will not indemnify its own board member, and Side A is exactly what responds. Side B reimburses the company for sums it has lawfully paid on the officer's behalf, for example in funding their defence. Side C is securities claims cover for the company itself and is of practically no relevance to an unlisted Latvian SIA. The most practical point: the deductible can differ for each part, and in the Latvian market it is realistic to agree a nil deductible for both Side A and Side B.
When this answer applies to your situation
- You see two or three different deductibles in a quote and cannot tell which applies when.
- The company wants to know what it will recover if it funds a board member's defence.
- A board member wants to know what happens to them if the company can no longer pay or brings a claim itself.
- A parent company is reviewing a subsidiary's policy.
What can change the answer
- Whether the policy separates the parts of the cover at all and what they are called.
- Whether the Side A deductible is nil – in market practice that is the more common option.
- Whether the wording applies the Side B deductible to a Side A loss in cases where the company was permitted to indemnify but did not.
- Whether the limit is shared across all parts and across the whole policy year.
- Whether the policy has an additional limit for officers for those losses the company is not permitted to indemnify.
What to check in the policy or quote
- The deductible separately for Side A and Side B
- Whether a nil deductible is available and at what increase in premium
- Whether the Side B deductible is quietly applied to Side A
- Whether the limit is shared across all parts and the whole policy year
- Whether Side C is included and whether this particular company needs it
The typical mistake
Assuming the deductible is one and the same for the whole policy. A quote may set it out separately for each part, and the Side B deductible is the one the client notices last – usually at the moment the company has already paid the lawyer and is working out how much of it will come back.
Example
A situation typical in practice (generalised example, not a specific client)
A typical situation: the company pays a board member's defence costs and submits them to the insurer. The claim payment is calculated under Side B, less the Side B deductible. If the deductible was not discussed when the quote was accepted, the company finds out about it only when the payment is made. This conversation is worth having before signing, while it is still a matter for negotiation rather than a fact of the calculation.
Related content
Sources and basis
This answer is based on Kristaps Račko's practice as a broker and on the legislation in force, verified on 20 August 2026; no specific client or policy data has been used. It is not individual insurance advice. General regulatory context: Apdrošināšanas un pārapdrošināšanas izplatīšanas likums, the Latvian Insurance and Reinsurance Distribution Law (likumi.lv); supervision of brokers – the Bank of Latvia register.
This is not individual insurance advice; actual cover always depends on the chosen insurer's wording and the special conditions of the policy.