Directors and officers liability insurance — universally known as D&O — protects individual directors and officers from personal financial loss arising from claims that allege wrongful acts, errors in judgment, misstatements, omissions, or breaches of duty performed in the course of their corporate role. It also protects the organization itself from indemnification obligations and, where Side C applies, from direct claims against the entity.
We offer D&O so that competent professionals can lead organizations without fear of personal financial loss. Our carriers offer traditional Side A, B, C and Side A-DIC forms and broaden them in keeping with changes in case law and legislation. We have a solution for every applicant regardless of business class.
D&O Insurance — a liability policy purchased by an organization to indemnify its directors, officers, and (often) the entity itself against legal defense costs, settlements, and judgments arising from claims that they breached duties owed in their corporate capacity. Premiums are paid by the company; the protection accrues primarily to the individuals who serve it.
The three sides of a D&O policy
Every modern D&O policy is built from three distinct insuring agreements, conventionally labeled Side A, Side B, and Side C. Understanding what each one does is the foundation of every conversation about coverage adequacy.
Side A — Individual non-indemnifiable loss
Side A pays loss directly to the individual director or officer when the company cannot or will not indemnify them. This happens most often in three scenarios: the company is insolvent, indemnification is prohibited by state law (notably in derivative settlements), or the company simply refuses. Side A typically has no retention — defense costs and indemnity payments flow to the individual from dollar one.
Side B — Corporate reimbursement
Side B reimburses the company when it indemnifies its directors and officers. This is the most heavily used insuring agreement in practice because companies indemnify their people whenever they are legally permitted to. Side B carries a retention; the company absorbs that retention before insurance dollars begin reimbursing.
Side C — Entity coverage
Side C covers the corporate entity itself for securities claims (in public-company forms) or for any covered claim (in many private and nonprofit forms). The breadth of Side C is one of the largest differences between public-company D&O and other forms.
Side A Difference-in-Conditions
A separate Side A DIC policy sits excess of and broader than the underlying D&O Side A. It pays when the underlying policy fails — insurer insolvency, rescission, refusal to advance defense, or a coverage gap created by an exclusion in the underlying form. For independent directors, a Side A DIC is the closest thing in the market to a truly personal asset-protection contract.
What D&O typically responds to
- Shareholder derivative suits alleging breach of fiduciary duty
- Securities class actions citing misrepresentation or omission in disclosures
- Regulatory investigations and subpoenas (defense and, where allowed, settlement)
- Employment-related claims against directors and officers personally
- Creditor claims when the company is insolvent or approaching insolvency
- Claims by competitors alleging unfair trade practices by company leadership
- Customer and vendor claims naming officers individually
- Government investigations, including SEC, DOJ, and state attorneys general
Public, private, and nonprofit — different forms for different exposures
D&O is not a single policy. Three distinct application paths exist because the exposure profiles differ materially.
Publicly traded companies face securities exposure that dominates the rest of the risk picture. Forms emphasize Side C securities coverage and carry significant retentions on Side B and Side C.
Privately held companies face a broader, more varied set of claims — investor disputes, creditor actions, employment claims, regulatory matters, and competitor disputes. Private-company forms commonly include EPL and Fiduciary by endorsement, becoming a true management liability package.
Nonprofit organizations have the lowest base rates but a uniquely broad exposure footprint: members, donors, beneficiaries, employees, volunteers, regulators, and state attorneys general can all bring claims. Nonprofit D&O forms are correspondingly broad.
Coverage applications
Three application paths, depending on your organization type. Download the form that matches your structure, complete it, and return it to us for an indication.
Common questions
Does D&O cover criminal acts?
Defense costs are typically advanced for criminal investigations until and unless a final adjudication establishes that the insured committed the criminal or fraudulent act. Once such an adjudication exists, the policy generally requires repayment of advanced defense costs. This is the standard "conduct exclusion" framework — fraud and criminal acts are not insurable as a matter of public policy, but the insured retains the right to a defense.
How is the limit shared between individuals and the entity?
In a traditional ABC tower, all three sides share a single aggregate limit. This is the classic argument for purchasing a separate Side A DIC: in a major event, the entity's Side B and Side C use can exhaust the tower before the individuals see any Side A response. Side A DIC preserves dedicated personal protection.
Is the policy "claims made"?
Yes. Virtually all D&O is written on a claims-made-and-reported basis, meaning the policy in force when the claim is made and reported is the policy that responds — regardless of when the alleged wrongful act occurred. This makes continuity of coverage and the handling of the retroactive date critical at every renewal.
D&O is the only insurance product where the people protected are not the people paying. The company writes the check; the directors and officers receive the protection. That gap between purchaser and beneficiary is what makes form analysis matter so much.
Speak to an underwriter
Five-minute phone calls solve most coverage questions faster than email. Call (800) 373-2804 and we will identify the right application for your sector, walk through the risk drivers our markets focus on, and tell you what to expect on price. Alternatively, complete the application above that matches your organization type and return it to us for a formal indication.