Directors & Officers


Directors & Officers (D&O) Insurance: What it Covers

D&O policies are designed to provide coverage against personal losses, given that the insured individuals are sued personally (due to their actual or alleged illegal acts) in organizational management. In addition, these policies usually cover legal fees and, in some cases, settlement costs. Organizations of all sizes can obtain D&O insurance policies for employee protection. 

D&O policies can offer protection against different types of claims that attest to wrongdoing, such as:

  • Misinterpretation
  • Stealing the firm’s intellectual assets
  • Improper usage of company funds

Note: A D&O insurance policy is not liable for covering actual stealing. These policies effectively protect against allegations in case no incident of actual malpractice happens. D&O policies do not cover fraud, personal profiting, bodily injury, and/or property damage.

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D&O Insurance: Important Protection

D&O policies protect against different types of claims. First, however, it is essential to understand the types of coverage provided under the insurance policy. Some typical coverage includes:

  • Protection for an organization’s directors and officers in the event that the organization cannot compensate the individuals for the losses (typically legal defense costs and settlements).
  • Reimbursement to the organization while compensating the directors and officers for losses.
  • “Entity Coverage”- covering the organization when the company and its officers are named under a lawsuit.
  • Protection against shareholder lawsuits.


  • D&O policies offer coverage against the personal assets of the directors and officers in the event that they are sued. Your organization’s general liability insurance may not provide coverage to individuals.
  • One can be sued individually and separately from the organization. They might need D&O coverage for legal fees in their defense, even if they are not guilty.

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