Directors and Officers (D&O) Insurance
Directors and officers insurance protects the personal assets of a company's leadership, board members, and officers when they're sued for decisions made in their management role, such as a shareholder alleging mismanagement, a competitor alleging unfair business practices, or a creditor alleging breach of fiduciary duty during a bankruptcy. The Allen Thomas Group places D&O coverage for businesses ranging from startups raising outside capital to established companies with an active board, since the exposure exists the moment a business has investors, a board, or outside stakeholders.
What D&O Insurance Actually Covers
D&O responds to claims alleging wrongful acts in the governance of the company: breach of fiduciary duty, misrepresentation of financial condition, failure to comply with regulations, and mismanagement of company funds. It typically pays defense costs, settlements, and judgments, and most policies include three coverage sides: Side A (protects individual directors/officers when the company can't indemnify them), Side B (reimburses the company for indemnifying its directors/officers), and Side C (covers the entity itself, usually for securities claims).
Who Actually Needs This
D&O isn't just for large public companies. Private companies, nonprofits, and startups all get sued over governance decisions, and startups raising venture capital are almost always required by investors to carry D&O before a funding round closes, since investors want their board seat protected. Nonprofit boards face their own version of this exposure from donors, beneficiaries, and regulators.
D&O vs. Employment Practices Liability
These two are commonly confused because both protect leadership decisions, but they cover different claimants. D&O responds to claims from shareholders, investors, creditors, and regulators about business/governance decisions. Employment practices liability (EPLI) responds specifically to employment-related claims, wrongful termination, discrimination, harassment, brought by employees. A business with a board and outside investors typically needs both, not one instead of the other.
How The Allen Thomas Group Can Help You
We'll help you understand exactly how directors and officers (d&o) insurance affects your coverage and cost, then shop your policy across 15+ A-rated carriers to find the right fit.
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