Corporate leaders can be sued personally for decisions they make on behalf of the company. Directors and officers insurance, often called D&O, covers the defense costs and damages arising from claims of wrongful acts by directors and officers in their managerial capacity.

Policies typically include side-A coverage for non-indemnifiable loss of individuals, side-B for reimbursement of the company when it indemnifies its leaders, and side-C for securities claims against the company itself. Exclusions for fraud, personal profit, and prior knowledge are standard, though severability provisions may protect innocent insureds.

Public companies, private firms, and nonprofit boards all buy D&O coverage. Claims can arise from shareholders, employees, regulators, or competitors. The application’s disclosures about past claims and corporate governance are critical; misrepresentation can void coverage. Limits and retention levels should reflect the organization’s size and risk profile.

• Coverage for claims against corporate directors and officers
• Includes defense costs and damages for wrongful acts
• Structured in side-A, B, and C components
• Essential for public, private, and nonprofit boards