Directors and Officers Liability Insurance

Our Directors and Officers Liability Insurance Services are specifically designed to meetthe needs of California Small Businesses. Connect with professional agent to get a quote.

What is Directors and Officers Liability Insurance?

Directors and Officers Liability is a type of insurance policy that provides financial protection for directors and officers of a company in the event they are sued for alleged wrongful acts committed in their capacity as leaders of the company. D&O Insurance is designed to cover the legal fees and other costs associated with defending against such claims, as well as any damages or settlements that may be awarded against the director or officer.

Wrongful acts can include breach of fiduciary duty, negligence, and other violations of the law or company policies. D&O Insurance is essential for businesses in California to protect their leaders from personal financial loss, as well as to attract and retain top talent who may be concerned about personal liability exposure.
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Directors and Officers Liability Insurance

Different Structure of Directors and Officers Liability Insurance

D&O Insurance, can have different structures depending on the needs of the business. Some common structures of D&O Insurance include:

Standalone Policy

A standalone D&O policy is a separate policy that provides coverage for the personal liability of directors and officers. This structure allows for more flexibility in coverage limits and deductibles.

Endorsement to General Liability Policy

Some businesses may choose to add D&O coverage as an endorsement to their existing General Liability Insurance policy. This can be a more cost-effective option but may have lower coverage limits.

Entity Coverage

Entity Coverage provides protection for the business itself, as opposed to just the directors and officers. This can include coverage for employment practices liability and cyber liability.

Side-A Coverage

Side-A coverage provides protection for directors and officers when the business is unable to indemnify them due to bankruptcy or other financial difficulties.
Directors and Officers Liability Insurance

What Does Directors And Officers Liability Insurance Cost?

The cost of  D&O Insurance can vary depending on several factors, such as the size and type of the organization, the level of risk involved, the coverage limit required, and the deductible selected.

On average, D&O Insurance can cost anywhere from a few thousand dollars to hundreds of thousands of dollars per year. For small and medium-sized businesses, the annual premium can range from $1,500 to $10,000, while for larger corporations, the cost can be upwards of $100,000 or more.
It’s essential to note that the cost of D&O Insurance may also vary based on the insurance carrier, as well as the coverage options and exclusions included in the policy. It’s always best to obtain multiple quotes from different insurance providers to compare coverage and pricing options to find the best fit for your organization’s needs.
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Common Question About Directors and Officers Liability Insurance
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D&O Liability Insurance policies may include specific exclusions, such as intentional wrongful acts, bodily injury, property damage, and professional liability claims (typically covered by separate professional liability insurance). Reviewing the policy terms and conditions to understand the specific exclusions and coverage limitations is essential.
D&O Liability Insurance helps to protect individual directors and officers rather than the company as a whole. However, some policies may provide limited coverage for specific claims against the company, such as securities claims or derivative actions.

It is not typically required by law, but we strongly recommend it for companies with boards of directors or officers. This coverage can attract and retain qualified individuals in leadership positions by providing them with personal liability protection.

Some D&O Liability Insurance policies offer the option to extend coverage to include past directors and officers, providing retroactive coverage for claims arising from their prior acts or decisions while serving in their roles.
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