Directors and Officers Insurance

Coverage protecting corporate directors and officers personally for alleged wrongful acts in managing the company.

Overview

Claims include breach of fiduciary duty, misleading disclosures, employment decisions, and regulatory investigations. Policies pay side A for individual directors when the company cannot indemnify, side B reimburses the company for indemnification it pays, and side C covers the entity itself for securities claims in public company forms. The coverage is claims made, with employment practices liability often bundled in. Shareholder suits after stock drops, regulatory investigations, and bankruptcy trustee suits against former boards are the classic claims. Outside directors often refuse board seats without it, and nonprofits carry it too, since volunteer shields do not prevent defense costs. Investors routinely require it before funding term sheets.