Directors & Officers (D&O)

Questions

• What does D&O insurance cover?

  D&O insurance pays defense costs, settlements, and judgments when directors and officers are sued personally over decisions made running the organization — and through its three insuring agreements it also protects the company. Side A covers individuals the company can't indemnify, Side B reimburses the company's indemnification, and Side C covers the entity itself.

• What insurance do investors require for startups?

  D&O first — often as a condition of the round or the board seat — typically alongside general liability and cyber, with crime and key person coverage appearing when the risk profile calls for them. None of this is law: it's a closing requirement enforced by the deal and the investor's counsel, which makes it non-optional in practice.

• What is D&O insurance for nonprofits?

  The same product as corporate D&O — coverage that defends board members and officers sued over how they govern the organization, with the standard Side A/B/C structure — bought because volunteer directors pledge their personal assets to serve. The federal Volunteer Protection Act limits some volunteer liability but not the nonprofit's, has broad exceptions, and stops no lawsuit from being filed.

• When should a startup consider Directors and Officers liability coverage?

  At the first priced round or the first outside board seat — whichever comes first. The consistent trigger across the startup insurance market is outside money: brokers advise binding D&O by or shortly after a priced round, and founders report investors requiring it before taking a board seat. Before that point, it's judgment rather than obligation.