The round is closing and someone asked about D&O.
Institutional investors and incoming board members expect directors and officers coverage in place before they join — not after.
- Directors & officers liability$1M – $5M by round
- Retention (securities claims)$25k – $50k
- Employment practices liability$1M, often on the same package
- Fiduciary liability$1M once a benefit plan exists
- Run-off / tail at exitSix years, negotiated into the purchase agreement
Ranges commonly seen. Your contracts and exposure decide the answer.
If any of these are true right now, this is the situation you're in.
- A term sheet or investor rights agreement mentions D&O
- An outside or independent director is joining the board
- You're closing a priced round, a secondary or a bridge
- Diligence has started and someone asked for evidence of management liability
- You're contemplating a down round, a restructuring or a layoff
Your lead investor asked about D&O.
Directors and officers liability protects the people who run the company. When an investor, employee, competitor or regulator alleges that a management decision caused harm, D&O pays defence costs and settlements. Without it, those land on individuals personally and on a balance sheet meant to fund product.
It becomes non-negotiable the moment there is a board seat you do not control. Experienced independent directors ask what the tower looks like before they accept, and most institutional investors put it in the closing checklist. It is usually cheaper to buy than founders expect, and dramatically more expensive to need and not have.
Timing is the practical issue. Two to four business days with a complete submission is realistic — financing documents, cap table summary, board list and financials. Starting the week of the closing call is tight but usually workable if we know it is coming.
The coverage this situation calls for
In priority order, with the reason each one is on the list.
Specifically, in this situation.
- Build the submission from your financing documents and cap table
- Get terms in hand ahead of the closing call, not after it
- Explain Side A, B and C in plain terms so the board conversation is short
- Plan the run-off tail early, before it gets negotiated under time pressure
- 01
Submission reviewed
Same business dayYou tell us about the business once. We read it the day it arrives and come back with anything still outstanding.
- 02
Coverage & requirements reviewed
Same business dayContracts, exposures, limits and requirements checked against what you actually need to carry — and what you don't.
- 03
Markets approached
Typically within 48 hoursWe approach carrier and wholesale markets suited to the risk, with a submission built to be read rather than skimmed.
- 04
Options compared
Typically 3–10 business daysCoverage, terms and pricing reviewed side by side — including the exclusions that decide whether a claim pays.
- 05
Bind & certificates
Promptly after approvalIssued promptly once you approve, with a plain-English summary of what you bought.
Answered.
Usually not until you take institutional money or add an outside director. The moment there is a board seat you do not control, buy it.
Only while the company has money and is legally permitted to indemnify. In insolvency or a derivative suit, indemnification is exactly what fails. That is what Side A exists for.
Typically two to four business days with a complete submission. Tell us the closing date and we work backwards from it.
Get covered without the runaround.
Tell us what changed. A broker reads it the same business day and comes back with what it means and what it costs.