What it covers
D&O insurance provides financial protection for directors and officers if they are held personally liable for decisions and actions taken as organisation leaders. Cover typically includes:
- Indemnification: the insurer pays damages, settlements or judgments resulting from covered claims on behalf of the insured.
- Defence costs: legal and other defence costs are generally covered, subject to the policy's terms.
- Entity coverage: some policies also cover the organisation itself when it is named alongside its directors and officers in a claim.
What directors and officers can be held liable for
- Breach of fiduciary duty: directors and officers must act in the best interests of the organisation and its stakeholders.
- Regulatory investigations and enforcement: personal liability can follow if the organisation breaches applicable laws or regulations.
- Shareholder claims: shareholders can sue over alleged mismanagement or breaches of duty that hurt share value.
- Employment practices liability: claims arising from wrongful termination, discrimination, harassment or retaliation.
Who typically needs it
Any organisation with a board of directors or senior officers making decisions that carry personal liability — from startups raising capital to established companies with shareholders.
How Cover Buddies can help
We help you compare options and set up the right policy for your leadership team, so you deal with one team instead of several insurers.
Common questions
Does D&O cover the company itself?
Some policies include entity coverage, which protects the organisation when it's named alongside its directors and officers in a claim.
Is this only for large companies?
No. Any company with a board or senior leadership making binding decisions carries this exposure, regardless of size.
What's typically excluded?
Exclusions and limitations vary by policy, so review them carefully before you sign.
Read our full guide: The Importance of Directors' and Officers' Insurance.
Related reading: Does D&O Insurance Make Sense for a One-Director Startup? | What Happens to My D&O Cover If I Step Down as Director?
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