Stress-test up to three Korean D&O claims across Side A, B, and C limits, retentions, defense-cost treatment, prior erosion, and the policy aggregate.
Enter Side cover, retentions, defense treatment, and remaining limits copied from the actual D&O schedule. Counsel, the insurer, and the broker must confirm liability, lawful company indemnification, exclusions, notice, premium, and payment approval.
Insurance funds are allocated in screen order. If limits run short, order changes the result, so confirm the actual priority-of-payments and allocation wording.
Individual director loss not reimbursed by the company
Are cover and notice confirmed under the current policy?
Enter a scenario established outside this tool; the model does not calculate liability
Modeled counsel, expert, e-discovery, and investigation cost
Fines, disgorgement, reputation, or internal response kept outside insurance
Entity loss from a securities claim
Are cover and notice confirmed under the current policy?
Enter a scenario established outside this tool; the model does not calculate liability
Modeled counsel, expert, e-discovery, and investigation cost
Fines, disgorgement, reputation, or internal response kept outside insurance
Company loss after indemnifying an individual director
Are cover and notice confirmed under the current policy?
Enter a scenario established outside this tool; the model does not calculate liability
Modeled counsel, expert, e-discovery, and investigation cost
Fines, disgorgement, reputation, or internal response kept outside insurance
Enter each Side as the currently available amount after prior claims. Enter the original shared aggregate and prior erosion separately.
Defense-cost limit treatment
Related-claim retention stress
Modeled limit rounding unit
The model applies confirmation, retention, remaining Side limit, then the shared aggregate.
Total modeled exposure
KRW 1,240,000,000
Modeled insurance funds
KRW 800,000,000
Individual director cost
KRW 20,000,000
Company cost
KRW 420,000,000
Protection ratio
64.5%
Aggregate after scenario
KRW 0
Aggregate eroded by defense
KRW 250,000,000
Unconfirmed-cover gap
KRW 0
Retention applied
KRW 50,000,000
Side-limit gap
KRW 20,000,000
Shared-aggregate gap
KRW 280,000,000
Separate defense-limit gap
KRW 0
Uncovered defense gap
KRW 0
Explicit uninsured cost
KRW 90,000,000
| Order | Claim | Side | Exposure | Retention | Insurance funds | Individual cost | Company cost | Side + aggregate gap |
|---|---|---|---|---|---|---|---|---|
| 1 | Shareholder derivative claim | Side A | KRW 420,000,000 | KRW 0 | KRW 400,000,000 | KRW 20,000,000 | KRW 0 | KRW 0 |
| 2 | Securities disclosure claim | Side C | KRW 600,000,000 | KRW 30,000,000 | KRW 400,000,000 | KRW 0 | KRW 200,000,000 | KRW 120,000,000 |
| 3 | Employment or management claim | Side B | KRW 220,000,000 | KRW 20,000,000 | KRW 0 | KRW 0 | KRW 220,000,000 | KRW 180,000,000 |
The lower end is the largest single claim and the upper end is all active claims. Neither is a statutory minimum, market average, or recommendation.
| Coverage bucket | Largest-claim lower end | All-claim upper end | Current entered limit | Gap to upper end |
|---|---|---|---|---|
| Side A | KRW 400,000,000 | KRW 400,000,000 | KRW 500,000,000 | No modeled shortfall |
| Side B | KRW 200,000,000 | KRW 200,000,000 | KRW 300,000,000 | No modeled shortfall |
| Side C | KRW 600,000,000 | KRW 600,000,000 | KRW 500,000,000 | Shortfall: KRW 100,000,000 |
| Shared aggregate | KRW 600,000,000 | KRW 1,100,000,000 | KRW 800,000,000 | Shortfall: KRW 300,000,000 |
When defense is inside the limit, the model allocates defense first within each claim to expose erosion. A Side limit is conservatively reduced by the candidate amount before the shared aggregate pays. The related-claim mode uses one retention pool per Side only as a sensitivity and never interprets policy wording.
Directors and officers liability insurance can protect an individual director and the company from financial loss connected with an alleged wrongful act.
The amount demanded by a claimant is not automatically the insurance payment.
The answer can change with the insured person, Side A, B, or C, the company's ability to indemnify, defense-cost treatment, related-claim wording, retentions, sublimits, and the aggregate already used.
This calculator does not quote premium, predict success in litigation, decide a director's legal liability, or approve an insurance claim.
It applies up to three stress scenarios to terms copied from an actual schedule or quote and separates individual out-of-pocket loss, company out-of-pocket loss, defense erosion, and a limit-review range.
The Korea-specific legal and insurance sources were verified on August 16, 2026, but the actual contract wording always controls.
Side A
Models loss when the company does not indemnify the director because indemnification is unavailable, prohibited, or financially impracticable. Any modeled shortfall is assigned to the individual.
Side B
Models loss first indemnified by the company and then submitted for reimbursement. Any modeled shortfall is assigned to the company.
Side C
Models the entity coverage defined for a securities claim. It does not mean that every entity claim or ordinary business loss is insured.
A real contract may use different headings, share one limit across all Sides, or define entity coverage more narrowly.
Confirm the named insured, subsidiaries, former directors, outside directorships, order of payments, and securities-claim definition instead of relying on the label alone.
| Step | Term | Model treatment |
|---|---|---|
| 1 | Coverage confirmation | An unconfirmed claim sends damages and defense cost to the coverage gap. |
| 2 | Side retention | The relevant retention is deducted from damages plus any defense cost selected inside the limit. |
| 3 | Side limit | Defense is allocated before damages to show conservative erosion of the available Side amount. |
| 4 | Policy aggregate | The remaining aggregate after prior use is allocated in the entered claim order. |
| 5 | Separate defense limit | Outside-limit defense uses the entered separate cap and its prior erosion rather than becoming unlimited. |
| 6 | Loss owner | A Side A shortfall is assigned to the individual, while Side B and C shortfalls are assigned to the company. |
Limit demand = damages + inside-limit defense − applied retention
Claim payout = lower of Side candidate and remaining aggregate + separate defense candidate
Out-of-pocket loss = gross exposure − modeled payout
Protection ratio = modeled payout ÷ gross exposure × 100
Claim order matters whenever a shared aggregate is insufficient.
Move a claim earlier or later to test priority, because this model allocates the available amount sequentially.
Actual allocation can depend on notice, related-claim wording, settlement timing, insurer consent, and an order-of-payments provision.
The defaults model a KRW 420,000,000 Side A shareholder derivative claim, a KRW 600,000,000 Side C securities disclosure claim, and a KRW 220,000,000 Side B employment or management claim.
Total modeled exposure is KRW 1,240,000,000, comprising KRW 820,000,000 of damages, KRW 330,000,000 of defense cost, and KRW 90,000,000 deliberately kept outside the modeled insurance payout.
Side A, B, and C limits are KRW 500,000,000, KRW 300,000,000, and KRW 500,000,000, while KRW 100,000,000 of a KRW 900,000,000 aggregate has already been used.
KRW 800M
The amount remaining after retention, Side limits, and the policy aggregate are applied.
KRW 20M
The explicit uninsured amount in the Side A scenario.
KRW 420M
Side B and C retention, limit gaps, and explicit uninsured amounts.
64.5%
The payout candidate divided by total modeled exposure, not a claim probability.
KRW 250M
Inside-limit defense cost that consumes the policy aggregate.
KRW 600M–1.1B
The rounded largest claim demand and sum of all claim demands.
The range is neither an insurer recommendation nor a statutory minimum.
It uses the largest entered claim as the lower stress point and all entered claims within one policy period as the upper stress point.
Adding KRW 100,000,000 already eroded produces a KRW 1,200,000,000 current-period aggregate requirement, KRW 300,000,000 above the entered aggregate.
Defense joins damages after the retention and can consume the Side and annual aggregate before a settlement or judgment is paid.
Defense is allocated from the entered defense cap after its prior erosion. This option never assumes unlimited defense.
All entered defense cost becomes a coverage gap until the wording, consent, and covered matter are confirmed.
Defense-cost wording can be as important as the headline limit because complex litigation may consume a material part of the aggregate before damages are resolved.
Ask whether investigations, interviews, experts, appeals, extradition, public-relations response, and pre-claim inquiries fall within the definition and whether prior written consent is required.
Use Side A when company indemnification is uncertain and compare a Side B version when the company may fund the defense or loss. The calculator does not decide whether indemnification is legally available.
Confirm that entity coverage applies to the entered claim and transaction. Listing status, offering type, depositary receipts, jurisdiction, and major shareholder wording can change the analysis.
Separate an insured management claim from salary, severance, or another contractual payment obligation. Confirm the insured persons and any employment-practices extension.
Find the point at which investigation cost begins and the definition of covered proceeding. Keep fines and penalties outside the payout unless insurability and policy wording are confirmed.
Review run-off, newly acquired subsidiaries, transaction exclusions, retroactive dates, and continuity of notice before and after the deal.
One defense can reduce the amount available to another insured. Compare separate retentions with the one-retention-per-Side related-claim assumption.
The current Korean Commercial Act record is law ID 001702 and history identifier MST 272919, promulgated July 22, 2025 and effective July 23, 2026.
Article 382-3 addresses directors' duty of loyalty, Article 399 liability to the company, Article 401 liability to third parties, and Article 403 the shareholder derivative action mechanism.
Articles 719 and 720 contain general liability-insurance and necessary defense-cost rules, but they do not create one universal D&O limit, retention, or payment result for every policy.
Korea Insurance Research Institute CEO Report 2026-01 discusses domestic D&O coverage, Side A, B, and C, claims-made-and-reported structure, and market gaps.
A 2026 public procurement policy condition provides a real contract example with defense cost inside a per-claim limit and several extensions.
Its KRW 50 billion amount and endorsements are an example only, not a statutory rule, market benchmark, or default for this calculator.
Match the insured list, subsidiaries, former directors, and outside positions to the current organization chart.
Mark whether each Side has an independent limit or shares one aggregate and order-of-payments clause.
Confirm inside- or outside-limit defense, separate caps, consent, lawyer selection, and advancement timing.
Obtain written confirmation of prior claims, circumstances, payments, reserves, and remaining aggregate.
Compare related-claim wording and retention frequency under both separate and grouped scenarios.
Separate derivative, employment, investigation, securities, cyber, and transaction extensions.
Read fraud, personal profit, fines, penalties, insured-versus-insured, and major shareholder exclusions.
Record run-off, retroactive date, extended reporting, merger, acquisition, listing, and control-change dates.
No. It only rounds the largest entered claim and the sum of entered claims. Assets, market capitalization, shareholder profile, foreign exposure, financial capacity, premium, and policy wording still require professional review.
No. Enter the separate amount actually confirmed. Reasonableness, necessity, prior consent, panel counsel, payment timing, and a separate cap may all apply.
No. Exclusions, unconfirmed coverage, Side and aggregate exhaustion, defense treatment, and explicit uninsured costs can still create a shortfall. Zero only means no entered retention.
Use prior disputes, outside-counsel budgets, procedural stage, party count, jurisdiction, and settlement exposure. When uncertainty is high, save base, adverse, and severe scenarios.
No. It only applies one retention pool per Side in this model. Actual relatedness depends on facts and policy definitions, so compare the separate-claim setting as well.
No. D&O pricing and underwriting depend on financial condition, industry, listing status, claim history, governance, limits, and insurance-market conditions. One public rate would not produce a defensible quote.
Two policies with the same KRW limit can protect an individual and the company very differently because of Side allocation, defense erosion, retentions, related claims, and prior aggregate use.
Enter the actual schedule, change claim order and defense treatment, and take the result table plus checklist to the broker, insurer, and legal adviser for wording-specific answers.
The calculator cannot replace that review, but it can make the questions and financial tradeoffs visible.