What is Directors and Officers Insurance?

Directors and officers (D&O) insurance protects company leaders from personal liability for decisions made in their official capacity. When shareholders, employees, competitors, or regulators claim that management decisions caused harm, D&O coverage pays for legal defense and any resulting settlements or judgments.

If your business has a board of directors, officers, or even a management team making significant decisions, D&O coverage protects the people leading your organization.

What Does D&O Insurance Cover?

D&O policies typically include three coverage parts: Side A covers individual directors and officers when the company cannot indemnify them. Side B reimburses the company for indemnifying its leaders. Side C (entity coverage) covers the company itself for certain claims. Coverage addresses allegations of mismanagement, breach of fiduciary duty, and regulatory violations.

Why D&O Matters for Growing Companies

As companies grow and add investors, board members, or formal management structures, D&O exposure increases. Potential investors often require D&O coverage before investing. Quality candidates for board positions may require it before serving. D&O insurance helps you attract talent and capital.