(a) A state agency, institution, or department may purchase a directors’ and officers’ liability insurance policy applicable to damages for conduct described under § 104.002 and other conduct customarily covered under directors’ and officers’ liability insurance policies for the benefit of:
(1) a director or officer of the agency, institution, or department;
(2) a member of a governing board, commission, or council of the agency, institution, or department; or
(3) a member of the executive staff of the agency, institution, or department.
(b) An insurance policy purchased under this section must have a deductible applicable to the liability of the state agency, institution, or department in an amount equal to the amount of the limits of liability established under § 104.003. The deductible applicable to an individual’s liability may be set at a lower amount.

(c) The purchase of an insurance policy under this section does not waive a defense, immunity, or jurisdictional bar available to the state agency, institution, or department purchasing the insurance or to the insured.