Directors & Officers.
Every other policy protects the company. This one protects the people who run it.
Directors and officers can be sued personally for decisions made on behalf of the business, and personal liability means personal assets. The company usually promises to indemnify them, and that promise is only as good as the company’s balance sheet at the moment it is tested.
This is not only a public company issue. Private companies and non-profits face claims from investors, lenders, competitors, regulators and employees, and non-profit board members are frequently volunteers who never realised they had taken on personal exposure.
The company, or the person
Commercial insurance protects the business. When a director is named personally, their own assets are what is at stake.
Personal liability is real
Directors and officers can be named individually. A judgment attaches to them, not to the entity, and their home and savings sit behind it.
Indemnity has limits
Most companies promise to indemnify. That promise depends on solvency and on what the law permits, and it fails precisely when it is needed most.
Defence begins immediately
Governance disputes are slow and document-heavy. Costs accumulate for months before anyone assesses merit.
It affects who will serve
Experienced directors ask about D&O before accepting a seat. Without it, the calibre of board a company can attract is materially lower.
Side A, B and C, in plain terms
D&O is not one coverage but three, and which one responds depends on whether the company can pay.
Side A — the individuals
Pays on behalf of directors and officers when the company cannot indemnify them. Insolvency, legal prohibition, or simple refusal. This is the personal asset protection.
Side B — the company
Reimburses the company when it does indemnify. In practice this is where most claims are paid, and it protects the balance sheet rather than the individual.
Side C — the entity
Covers the company itself for securities claims. Broader for public companies; for private companies it is usually limited to securities-type allegations.
Standalone Side A
An additional layer that only individuals can access, sitting above the main program. Worth considering wherever solvency risk or shareholder conflict is a genuine possibility.
Who actually sues a board
Rarely dramatic misconduct. Usually a decision that was reasonable at the time and looks different once money has been lost.
Investors and shareholders
Minority holders alleging dilution, misrepresentation during a raise, or decisions favouring one group over another. The most common private company claim.
Lenders and creditors
Particularly around insolvency, where directors face allegations about trading position and preference of payments.
Competitors
Claims of unfair competition, poaching, or misuse of confidential information, frequently naming the executives personally rather than only the company.
Regulators
Investigations naming individuals. Even where no action follows, the cost of responding is real and rarely budgeted for.
Employees
Senior-level disputes that name the board over governance and oversight rather than the employment decision itself.
Transaction disputes
Sales, mergers and failed deals produce claims against the directors who approved them, often years afterwards.
Structure first, price second
D&O limits are frequently set by habit rather than analysis, and the exclusions differ far more between carriers than the premiums do.
Size the limit properly
Against your capital raised, your debt, your shareholder structure and your sector, rather than against what the company bought when it was smaller.
Read the insured-versus-insured exclusion
It can bar claims brought by the company against its own directors, which is exactly what happens in a shareholder dispute. Modern wordings carve out important exceptions; older ones may not.
Confirm run-off provisions
Directors stay exposed after they leave and after a sale. Run-off is negotiated far more cheaply before a transaction than during one.
Then shop appetite
Private company D&O is written by specialists, and appetite varies sharply by sector, funding stage and financial position.
Send us your policy and we will map the three sides.
Whether Side A is adequate, what the insured-versus-insured exclusion actually says, and how run-off is handled tell you whether the people running your company are genuinely protected. No cost, no obligation.
D&O, answered plainly
We are private. Do we really need D&O?+
Private companies face claims from investors, lenders, competitors, customers, regulators and employees. Any business that has raised money, holds debt covenants, or has minority shareholders has genuine exposure, and it usually becomes a condition the first time an outside investor comes in.
What are Side A, B and C?+
Side A protects individuals when the company cannot indemnify them, typically in insolvency or where indemnity is barred. Side B reimburses the company when it does indemnify. Side C covers the entity itself for securities claims. Side A is the part that protects personal assets directly.
Does our indemnity in the bylaws not cover the directors?+
Only while the company is solvent and legally permitted to pay. Insolvency is exactly when directors are most likely to be sued and least likely to be indemnified, which is why Side A exists and why standalone Side A cover is often bought alongside.
Do non-profit boards need it?+
Yes, and it is frequently overlooked. Volunteer board members can be personally named in claims about employment decisions, financial oversight or governance. Many capable people will not join a board without confirmation that cover is in place.
What does it cover in practice?+
Alleged breach of duty, mismanagement, misrepresentation, failure of oversight, regulatory investigations, and disputes with shareholders, lenders and competitors. It funds defence, which on a governance dispute is substantial.
Is D&O claims-made?+
Yes, and the same discipline as E&O applies: continuous coverage, a protected retroactive date, and run-off cover when a company is sold or wound down. Directors remain exposed for years after they leave, and run-off is what answers then.
What is not covered?+
Deliberate fraud and personal profit taken illegally, typically excluded once finally adjudicated. Bodily injury and property damage belong elsewhere. Employment claims sit on EPLI, though many private company policies combine the two.
When do investors start requiring it?+
Usually at the first institutional round, and frequently earlier if there is an outside board seat. Arranging it before the raise is simpler and cheaper than arranging it under a closing deadline.