What this coverage is
Directors and officers (D&O) insurance helps protect the personal assets of an organization's leaders, and often the organization itself, when claims allege that their management decisions caused harm. Allegations can come from investors, regulators, employees, competitors, or others.
D&O is commonly used by corporations, nonprofits, and private companies alike. It helps attract and retain qualified board members by offering protection against the personal exposure that leadership can carry.
Who commonly needs it
Organizations with a board of directors, officers, or other governing leaders commonly carry D&O, including private companies, startups seeking investment, and nonprofits.
Where this coverage commonly fits
Supplemental — coverage added to address a specific exposure on top of a core program. D&O is commonly added for businesses and nonprofits with boards, investors, or outside stakeholders.
- Private companies and startups
- Nonprofits and associations with boards
- Technology firms raising capital
- Financial and professional organizations
- Manufacturers and growing businesses
What it may cover
- Defense costs for covered claims against directors and officers
- Settlements or judgments for covered management decisions
- Certain claims by investors, regulators, or competitors
- Allegations of breach of fiduciary duty or mismanagement
- Coverage for the organization in certain securities or entity claims
What it typically excludes
- Fraud, intentional wrongdoing, and illegal personal profit
- Bodily injury and property damage
- Claims covered by other policies, such as EPLI or E&O
- Prior known claims or pending litigation
- Fines and penalties that are not insurable
Hypothetical claim scenarios
These illustrative examples are for general understanding only. Coverage depends on the specific policy terms, conditions, and exclusions.
Investor lawsuit
Investors allege that leadership misrepresented the company's prospects. D&O may help with defense and any covered settlement, subject to policy terms.
Breach of duty claim
A stakeholder alleges a board member breached a fiduciary duty. The policy may help respond to the covered allegation and defense costs.
Nonprofit board dispute
A nonprofit's directors face a claim tied to a governance decision. D&O may help protect their personal exposure, subject to terms.
What commonly affects cost
- Organization size, structure, and financials
- Industry and regulatory environment
- Funding stage and investor involvement
- Governance practices and claims history
- Selected limits and retentions
How much does it cost?
On average, many businesses pay roughly $1,500–$5,000 per year for many private companies for directors & officers insurance. That figure is a general national average only — your actual premium is set during underwriting.
- Directors & Officers Insurance$1,500–$5,000 per year for many private companies
These are general national averages shown for comparison only — not a quote. Actual premiums vary widely with underwriting and depend on the factors above and the specifics of your business, including size, revenue, location, claims history, and the limits you choose. See how we estimate costs.
Industries where this coverage is common
Coverage needs vary business to business — most companies consider this protection regardless of industry. These are simply the industries where we see it most often.
See how this coverage works in your industry
A few examples from the business types we cover — this coverage applies well beyond the industries shown here.
Don't see your business type? Browse all industries we cover — coverage recommendations are tailored to every operation.
Frequently asked questions
Who does D&O insurance protect?
D&O commonly protects directors, officers, and other leaders against claims tied to their management decisions, and in some cases the organization itself.
Do nonprofits need D&O insurance?
Nonprofit board members can face personal exposure for governance decisions. D&O is commonly used to help protect volunteers and directors.
How is D&O different from professional liability?
D&O addresses claims arising from management and governance decisions, while professional liability (E&O) addresses claims about the professional services the business delivers to clients.
Does D&O cover fraud?
Deliberate fraud, intentional wrongdoing, and illegal personal profit are generally excluded. Coverage focuses on alleged wrongful management acts.
Why do investors often require D&O?
Investors commonly expect D&O coverage to protect leadership and to support sound governance before committing capital to a company.
How do I get a quote for this coverage?
Call The Southern Agency at 1-800-777-1872 or request a quote online, and an advisor can help tailor coverage to your business.
Related coverages
- Professional Liability Insurance Protection against claims of professional error, omission, or negligent service.
- Cyber Liability Insurance Response and liability coverage for data breaches and cyber incidents.
- Umbrella / Excess Liability Insurance Additional liability limits that sit above underlying policies.
- Employment Practices Liability Insurance Defense and liability coverage for employment-related claims such as discrimination or wrongful termination.