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Directors & Officers (D&O) Insurance

Directors & Officers Insurance

What is Directors & Officers (D&O) Insurance?

Directors and Officers (D&O) insurance is a type of liability coverage that provides financial protection for individuals serving as directors, officers, or leaders within a company or organization. This insurance is designed to safeguard these individuals from personal losses in case they are sued for alleged wrongful acts while managing the company.

By having D&O insurance in place, directors and officers can make decisions with more confidence, knowing that they have a level of protection against personal liability. This type of coverage is crucial for attracting and retaining talented individuals to serve in leadership positions within companies, as it helps mitigate the personal financial risks associated with the responsibilities of such roles.

What Does D&O Insurance Cover?

Below is a comprehensive breakdown of protection that may be available for those steering the course of your business.  Maxam Assurance Agency can assist you in navigating the process, making sure you have the coverage that best aligns with your exposures.

  • Legal Defense Costs: Coverage for legal expenses incurred in defending against lawsuits, investigations, or legal actions brought against directors and officers.

  • Settlements and Judgments: Financial protection for settlements or judgments that may arise from covered claims, providing a safety net for personal assets.

  • Wrongful Acts: Protection for alleged errors in judgment, breaches of duty, and other wrongful acts committed by directors and officers while managing the organization.

  • Employment Practices Liability: Coverage for claims related to employment issues, such as wrongful termination, discrimination, or harassment allegations against directors and officers.

  • Fiduciary Liability: Protection for breaches of fiduciary duties, including mismanagement of employee benefit plans or other financial responsibilities.

  • Workplace Violence: The Workplace Violence Act encompasses both the factual or claimed intentional and unlawful utilization of, or the threat to use, deadly force with the intention of causing harm.

  • Internet Liability: covers defamation, invasion of privacy, and infringement of copyrights, trademarks, or trade names. It also includes improper use of literary or artistic elements.

  • Entity Coverage: Extends coverage to the organization itself, providing additional protection for certain claims brought against the company.

  • Side A, B, and C Coverage: Different facets of protection, where Side A covers individual directors and officers, Side B covers the organization's reimbursement for indemnifying individuals, and Side C covers the entity itself.

  • Crisis Management Costs: Reimbursement for costs associated with managing and mitigating a crisis, such as public relations and communication expenses.

  • Prior Acts Coverage: Addresses claims arising from wrongful acts that occurred before the inception of the D&O policy, ensuring comprehensive coverage.

D&O Insurance for Small Business and Non-Profit
D&O Insurance for publicly traded and private companies

Who needs D&O insurance?

Organizations with a higher public profile, such as publicly traded companies, often have a greater need for D&O insurance due to increased scrutiny and potential exposure to lawsuits. Executives and officers in these companies may face significant personal liability, making D&O coverage crucial for protecting their assets.

Smaller businesses and private companies may still benefit from D&O insurance, especially if they have a board of directors or officers making critical decisions. Startups, in particular, may find D&O insurance valuable as they navigate early-stage challenges.

Non-profit organizations also frequently require D&O insurance, as their leadership can be held personally liable for decisions made on behalf of the organization.

On the other hand, sole proprietors and very small businesses with no formal board or executive team may find the need for D&O insurance less pressing. Additionally, businesses with a low risk of legal actions against leadership may not prioritize this coverage as much as those operating in more litigious industries.


Ultimately, the decision to obtain D&O insurance depends on the organization's structure, risk profile, and the potential exposure of its leadership to legal challenges.

Book a Free D&O Consultation Call

We offer a complimentary consultation call. This quick yet valuable session is designed to provide you with personalized insurance insights and guidance. During this brief chat, we'll discuss your insurance needs, address any questions or concerns you may have, and explore potential coverage options tailored to your unique circumstances.

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