The policy your board asks about before they join.
D&O covers the personal liability of directors and officers — and the company's obligation to indemnify them — when management decisions are challenged.
What D&O actually does
Directors & Officers liability protects the people who run the company. When a shareholder, investor, employee, competitor, or regulator alleges that a decision made by management caused harm, D&O pays defense costs and settlements. Without it, those costs land on the individuals personally, and on a balance sheet that was supposed to fund product.
It is structured in three parts. Side A protects individuals when the company cannot indemnify them — typically because it is insolvent or legally barred from doing so. Side B reimburses the company when it does indemnify. Side C, entity coverage, protects the company itself for securities claims. For a private venture-backed company, Side C is usually limited to securities-type matters, which is exactly where funding-round disputes live.
Practically, D&O becomes non-negotiable the moment you have a board seat held by someone who isn't a founder. Experienced independent directors and most institutional investors will ask what your D&O tower looks like before they sign. It is often cheaper to buy than founders expect, and dramatically more expensive to need and not have.
Buy it when
- A term sheet or investor rights agreement requires D&O
- You are adding an independent director
- You are raising a priced round or running a secondary
- You are contemplating a down round, restructuring, or layoff
- You are entering diligence for an acquisition
What it covers
Grants vary by carrier and form. These are the components we look for when we place it.
Securities claims from investors
Allegations of misrepresentation or omission in connection with a financing, secondary sale, or acquisition.
Breach of fiduciary duty
Claims that directors failed their duty of care or loyalty — common in down rounds, recapitalizations, and preference disputes.
Regulatory investigations
Costs of responding to SEC, DOJ, state AG, and other regulatory inquiries directed at the company or its officers.
Employment claims against individuals
Where an executive is personally named. EPLI is the primary policy for employment matters; D&O picks up the individual exposure.
Competitor and unfair-practice claims
Allegations of misappropriation, tortious interference, or unfair competition brought against officers.
M&A and transaction disputes
Claims arising from a sale, merger, or change of control — including post-closing indemnity and earn-out disputes.
What it doesn't cover
We put this in front of you at binding — the only moment you can still do something about it.
- Bodily injury and property damage
- Fraud and personal profit obtained illegally — though defense is usually advanced until final adjudication
- Prior and pending litigation as of the policy's retroactive date
- Insured vs. insured claims, subject to important carve-backs for derivative suits, bankruptcy trustees, and former employees
- Professional services failures — that is Tech E&O
- ERISA fiduciary claims, unless Fiduciary Liability is added
Three ways this policy earns its premium
Composite scenarios drawn from how these losses typically develop. Illustrative, not case files.
A down round triggers a preferred stockholder suit
Early investors allege the board breached its duty of loyalty by approving a recapitalization that wiped out their position. Defense costs exceed $900,000 before the matter resolves.
A departing co-founder challenges vesting acceleration
Litigation names the CEO and two board members individually. D&O funds the defense; without it, the individuals fund it themselves.
Acquirer claims misrepresentation post-close
Twelve months after the sale, the buyer alleges revenue quality was misstated during diligence and pursues the former officers. The run-off (tail) policy purchased at closing is what responds.
What limit is normal
Ranges we commonly see for technology companies. Your contracts and exposure decide the answer — this is where the conversation starts, not where it ends.
| Stage | Typical | |
|---|---|---|
| Seed | $1M | Often the first policy bought after the round closes, especially with an outside board seat. |
| Series A | $2M – $3M | Standard for institutional rounds. Retention typically $25k–$50k for securities claims. |
| Series B | $3M – $5M | Consider a dedicated Side A layer once the board grows. |
| Series C+ | $5M – $20M+ | Layered tower with Side A DIC. Pre-IPO structures are a distinct exercise. |
Companies that need this
- Any company that has taken institutional venture capital
- Companies with an outside or independent board member
- Companies preparing for a priced round, secondary, or acquisition
- Companies with more than a handful of employees and real revenue
- Founders who would rather not personally fund a defense
What we need to quote
- Cap table summary and most recent financing documents
- Board composition and bios
- Two years of financials and current runway
- Articles, bylaws, and indemnification agreements
- Any pending or threatened litigation, demand letters, or regulatory contact
- Details of planned transactions in the next 12 months
Most of this is collected once in the Atlas submission and reused across the markets we approach.
Start a submissionSituations that put this policy on your desk
D&O, answered
Usually not until you take institutional money or add an outside director. The moment there is a board seat you don't control, buy it.
It protects you only to the extent the company has money and is legally permitted to indemnify. In insolvency or in a derivative suit, indemnification is exactly what fails. That is what Side A exists for.
You buy a run-off, or tail, policy — typically six years — at closing. It is almost always negotiated into the purchase agreement. Plan for it early; buying it under time pressure is expensive.
Only the individuals named, and only in a limited way. EPLI is the correct policy for wrongful termination, discrimination, and harassment claims against the company.
Find out what d&o costs for your company.
Tell us about the business once. A broker reviews it the same business day and comes back with a plan and a timeline.