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Directors & Officers Liability Business

Directors & Officers is a type of liability insurance covering officers, board members, and employees for claims made against them while carrying out their duties.

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  • Non-profit boards
  • Community Associations such as a Homeowners Association or Board
  • For-profit companies with a board of directors


  • A-side coverage. This part covers directors, officers, and sometimes employees, for defense
    costs, settlement fees, or judgments if the company cannot indemnify them, such as if the
    company has declared bankruptcy.
  • B-side coverage. This covers the company for directors’, officers’, and employees’ losses when
    the company does indemnify them.
  • C-side coverage. Also called “entity coverage,” this financially protects the corporation. Entity
    coverage may reduce the limits available to protect the individual officers and directors

Cost Factors

  • Size or type of business
  • Amount of debt
  • Insurance limits
  • Risk management techniques

Claim Examples

  • Breach of fiduciary duty resulting in financial losses or bankruptcy
  • Misrepresentation of company assets
  • Misuse of business funds – including non-profits
  • Fraud
  • Failure to comply with workplace laws
  • Theft of intellectual property and poaching of competitor’s customers
  • Lack of corporate governance
  • Discrimation or sexual harassment

Directors and Officers (D&O) insurance is a type of liability insurance for losses suffered as a result of the actions of a business’s board of directors and executives.

Directors and officers owe a duty of care to the company’s shareholders, customers and employees, members or donors. When they breach that duty of care, usually by failing to exercise reasonable care when making decisions, a D&O policy will cover the resulting damages.

D&O policies are payable to either the directors and officers themselves, or directly to the company. This type of insurance has the potential to cover a wide variety of claims brought against a business for the actions of its directors and officers.

Do you have a claims made or occurrence based policy. Be careful when switching between types of policies. You may need tail coverage!