What Is Directors and Officers Insurance?
D&O insurance can help pay covered defense costs and losses from claims against company leaders over management decisions. If your organization has a board or executives, check whether the company itself is insured and whether legal bills reduce the limit.
What Does Directors and Officers Insurance Cover?
After a funding round, investors may challenge board disclosures; legal defense bills can reduce the amount left for a settlement. 3,4 4
D&O insurance can address covered claims alleging wrongful acts in your organization’s management. 1The Costs of a Covered Claim
For covered D&O claims, the policy may pay legal defense costs, settlements and judgments. 1Individuals and the Company
Indemnification means the company pays on a leader's behalf. D&O can protect the individual when the company doesn't indemnify them, reimburse the company when it does, and cover specified claims against the company itself. Confirm which of those protections you've bought; they can have different terms. 3,4 3,4
| Coverage question | Ask the insurer |
|---|---|
| The company does not indemnify a leader | What protection applies to the leader’s covered loss? |
| The company indemnifies a leader | What reimbursement protection applies to the organization? |
| A claim names the company | Which company claims does the policy cover? |
Who Needs Directors and Officers Insurance?
Investors, employees or regulators may challenge decisions made by your leaders, and a lawsuit can name the company too. 5
Directors and Officers Insurance Coverage Examples
What happened
Investors Sue the Board
Investors allege that your board misrepresented the business during a funding round.
What happened
The Lawsuit Names the Company Too
A lawsuit names your executives and the company, and both need legal representation.
How Do You Compare Directors and Officers Insurance Coverage and Costs?
The Scope of Company Coverage
Check what company claims the policy covers: a grant limited to securities claims is narrower than coverage for other alleged company wrongful acts. 3,4Defense Expenses and Retentions
Ask whether defense costs reduce the limit left to pay a settlement or judgment, and what retention applies. 4What Exclusions and Conditions Should You Check in Directors and Officers Insurance?
Earlier Disputes and Reporting
Compare when you must make and report a claim, and ask how earlier disputes or notices affect a new or renewal policy. 3Changes at Renewal
Review the exclusions and any changes at renewal so you know which management claims fall outside the policy. 2How Does Directors and Officers Insurance Compare With Related Coverage?
Professional Liability
Professional liability addresses claims about your services or advice; D&O addresses covered allegations about management decisions. 1Employment Practices Liability
Employment practices liability addresses employment-related claims; check that coverage separately when you compare a management-liability program. 1What Do You Need for Directors and Officers Insurance Quotes?
Prepare your ownership and entity overview, financial information, planned transactions, and history of claims or disputes to discuss with your broker. 5Ownership, Finances and Planned Changes
| Prepare | How to use it in the discussion |
|---|---|
| Entity and ownership overview | Identify the organization and relationships you want considered. |
| Financial information | Give the broker context for the proposed coverage. |
| Planned transactions | Explain changes the business is contemplating. |
| Claims, disputes and earlier notices | Discuss the timing and prior-matters provisions. |
| Current coverage, where applicable | Compare renewal changes and the proposed grants. |
Directors and Officers Insurance: Key Terms in Plain English
Individual and Reimbursement Protection
Direct protection when the company cannot pay on a leader’s behalf, or reimbursement when it does. 3,4
Entity Coverage
Protection for the company itself. A securities-only grant is different from broader company wrongful-act coverage. 3,4
Frequently Asked Questions About Directors and Officers Insurance
Does D&O Cover the Company as Well as Its Leaders?
Does D&O Replace Employment Practices Coverage?
Don't rely on D&O alone for employment claims. Confirm whether your management-liability program includes EPLI and what that part covers. 1
Can D&O Insurance Pay Legal Defense Costs?
Covered D&O losses can include legal defense costs as well as settlements and judgments. Read the offered terms to see which costs fall within the protection you are buying. 1
What Should I Check When Renewing D&O Insurance?
Review the exclusions and any changes from the expiring policy. The D&O label alone does not tell you which management-related claims remain covered after renewal. 2
More Directors and Officers (D&O) Insurance Questions
What Is D&O Insurance?
D&O is liability insurance for claims alleging wrongful acts by an organization’s directors or officers.
What Is Side A D&O Insurance?
Side A is D&O coverage for individuals when the organization cannot indemnify them.
Does D&O Cover Bankruptcy?
D&O can cover claims against your directors and officers that follow a bankruptcy, such as trustee or creditor suits, but it never pays the company's debts.
Does D&O Cover Board Members?
Yes, D&O covers board members for claims over their board service, as long as they fit the policy's definition of an insured person.
Does D&O Cover Breach of Contract?
Usually not: a plain contract dispute isn't a management wrongful act, though a claim that also alleges misleading management conduct may be covered.
Does D&O Cover Breach of Fiduciary Duty?
D&O may cover a fiduciary-duty claim about corporate management, while benefit-plan duties may require fiduciary liability insurance.
Does D&O Cover Employees?
Some D&O policies include employees as insureds for defined acts in an insured capacity.
Does D&O Cover Employment Claims?
D&O may cover some claims naming leaders over workplace decisions, but EPLI is the coverage designed for employment claims.
D&O Insurance Guides by State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Which Insurance Providers Offer D&O Insurance?
Sources for D&O Insurance
- Glossary of Business Insurance Terms. The Hartford; Directors and Officers Liability Insurance; Errors and Omissions Insurance; Employment Practices Liability Insurance. Accessed 2026-09-16.
- SR 19-12: Statement Regarding Insurance Policies for Directors and Officers. Board of Governors of the Federal Reserve System; Statement on exclusionary language and review. Version: July 23, 2019. Accessed 2026-09-16.
- The Chubb Primary Directors & Officers and Entity Securities Liability Insurance. Chubb Group of Insurance Companies; hosted by eperils; I.A–C p.1; I.C p.1; I and III.A–B pp.1–2; VI Reporting pp.3–4. Version: 14-02-18480 (06/2012). Accessed 2026-09-16.
- Private Company Directors and Officers Liability Coverage. Travelers Casualty and Surety Company of America; I.A–C p.1; I.C p.1; Header p.1 and VI.A pp.6–7. Version: PDO-3001 Ed. 01-09. Accessed 2026-09-16.
- Private Company Directors and Officers Liability Coverage Application. Travelers Casualty and Surety Company of America; I–VII pp.1–4. Version: PDO-1100W-IND Ed. 01-09. Accessed 2026-09-16.