Directors & Officers · North San Diego
D&O liability for private technology companies, startups, and venture-backed businesses — protecting founders, board members, and executives from claims tied to how the company is run.
Why This Matters
D&O insurance protects the personal assets of your directors and officers from claims arising out of decisions they made running the company. It's easy to assume this only applies to public companies with shareholders — it doesn't. Private and early-stage companies face claims from investors, employees, competitors, and regulators just as often, and without coverage, a founder or board member's personal assets can be exposed to defend or settle a claim.
A typical D&O policy is built around three coverage parts. Side A covers individual directors and officers directly when the company can't or won't indemnify them. Side B reimburses the company when it does indemnify its leadership for a covered claim. Side C, often called entity coverage, protects the company itself, though for private companies it's usually limited to securities-related claims. Side A is frequently the coverage that matters most to an individual board member deciding whether to join your board at all.
Institutional investors and outside board members increasingly require D&O coverage as a condition of closing a funding round or joining a board. This is worth addressing before a term sheet is signed, not discovered as a last-minute blocker during closing.
Coverage needs to scale with the company. Limits appropriate at seed stage are frequently inadequate after a Series A or B, once headcount, contracts, investor count, and balance sheet size have all grown — and D&O is one of the coverages most likely to quietly become underinsured if it isn't reviewed at every funding milestone.
Common Questions
Yes. Private and even early-stage companies benefit from D&O coverage. Claims can come from investors, employees, competitors, or regulators — not just public shareholders. If you've raised outside capital, have a board of directors, or are planning to raise a future round, investors will often require D&O coverage as a condition of funding, and the policy protects your directors' and officers' personal assets from claims arising out of their management decisions.
Side A covers individual directors and officers directly when the company can't or won't indemnify them — often because of bankruptcy or a conflict of interest. Side B reimburses the company when it does indemnify its directors and officers for a covered claim. Side C, sometimes called entity coverage, protects the company itself, though it's typically limited to securities claims for private companies. Understanding which side responds to which scenario matters, because Side A coverage is often the layer that actually protects a founder's personal assets when it matters most.
Frequently, yes, particularly once institutional investors and outside board members are involved. Board members are personally exposed to claims tied to the company's decisions, and most experienced board members won't join — or won't close a round — without D&O coverage in place, or at minimum a clear commitment to bind it. It's worth having this conversation with your broker before term sheet signing, not after.
The most common claims come from employment practices — wrongful termination, discrimination, or retaliation claims from current or former employees — followed by claims from investors alleging mismanagement or misrepresentation, and disputes with competitors or business partners over IP, contracts, or unfair competition. Regulatory claims, while less frequent, tend to be the most expensive when they happen. Most of these claims are covered under D&O, though employment claims are sometimes carved into a separate but related employment practices liability (EPL) policy.
General liability and business owners policies cover third-party bodily injury and property damage — a customer slipping in your office, for example. D&O covers financial and management-decision claims: allegations of mismanagement, breach of fiduciary duty, misrepresentation to investors, or wrongful acts in running the company. These are entirely different categories of risk, and a GL or BOP policy provides no coverage at all for a D&O-type claim.
Yes. Limits that were appropriate at seed stage are often inadequate after a Series A or B, when the company has more employees, more contracts, more investors, and a materially larger balance sheet to go after in a claim. We review D&O limits and policy terms at every funding milestone and renewal, not just when a client asks, since this is one of the coverages most likely to become underinsured as a company scales.
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