Directors and Officers (D&O) liability insurance
D&O insurance isn't just a legal formality—it's a prerequisite for scale. Whether you are navigating regulations or closing a funding round, RiskCube provides tailored D&O coverage required to protect the personal assets of your leadership from lawsuits related to management decisions.
Most companies get quotes within 1–2 business days
Who needs D&O insurance coverage and why does it matter?
If you're raising funding, adding institutional investors to your board, or getting regulated, D&O is essential. This is especially true for high-stakes, fast-moving sectors like:
AI startups
Investors and regulators look to the board to ensure "algorithmic accountability." D&O protects you from "AI washing" allegations and oversight claims as you push the boundaries of innovation.
Startups raising a priced round
Your new lead investor put a board observer or board seat in the term sheet, and D&O is almost always a closing condition. Even pre-seed institutional rounds increasingly require D&O before funds wire.
Defense and govtech companies
Many government contracts and specialized grants view D&O as a baseline signal of company maturity. Without it, you're a liability; with it, you're a partner.
Fintech
You're selling into a "high-trust" environment where your primary customers are banks, custodians, or financial institutions. To close deals with enterprise customers, you must pass procurement audits where D&O insurance is required.
Space and aerospace founders
You're operating in a regulated launch environment with FAA, FCC, and ITAR exposure. Board candidates from established aerospace companies won't take a seat without D&O in place.
"RiskCube compared D&O quotes across 5 carriers and showed us exactly where the coverage gaps were — we closed our funding round with confidence."
What is Directors and Officers (D&O) insurance?
Directors and officers insurance, also called D&O liability insurance, protects founders and boards if they are sued over management decisions.
It safeguards founders, executives, and board members during claims from shareholders, investors, regulators, competitors, or employees.
A typical D&O program combines three coverage parts: Side A, B, and C.
Side A coverage
Side A protects individual directors and officers when the company can't indemnify them. This applies during insolvency events, shareholder disputes, or lawsuits naming startup leadership personally.
Side B coverage
Side B helps to reimburse the company after it indemnifies directors or officers during covered claims.
Side C coverage
Side C protects the company itself after lawsuits target the organization. Private-company D&O policies typically extend this protection to governance disputes, securities-related allegations, or regulatory investigations.
Example situations:
- Securities class action, Dunn v. Upstart Holdings, Inc., brought against Upstart—a fintech lender—shows how important D&O insurance is: The lawsuit alleges that Upstart and its executives misled investors about the performance of its AI model. The company performance dropped, what caused an investor lawsuit claiming that management knew about calibration failures. D&O policies could have provided coverage for defense and, possibly, liability in securities suits alleging misrepresentations about AI systems.
- A space startup misses a satellite deployment milestone it disclosed to investors during its seed round. An investor alleges material misrepresentation and names the founders personally for breach of fiduciary duty. The D&O policy funds the company's defense and the founders' separate personal counsel.
- A govtech startup selling AI software to a state agency receives an Attorney General inquiry into how customer data is processed by its AI models. The investigation names the CEO and CTO individually and requests Slack messages, board minutes, and model training documentation. D&O covers the subpoena response, individual officer counsel, and any subsequent enforcement action.
What's covered
Misrepresentation allegations
Covers a wide range of allegations including claims on revenue forecasts, model accuracy, partnership disclosures, or company representations shared during investor or institutional diligence.
Investor lawsuits
Coverage helps after shareholders allege inaccurate financial projections, poor governance decisions, dilution disputes, or disclosure issues following venture financing or board expansion.
Fiduciary-duty claims
Coverage applies after allegations that executives or directors failed to meet fiduciary responsibilities involving company oversight or executive decision-making.
Defense expenses
D&O insurance pays attorney fees, court expenses, and legal representation.
Settlements and judgments
Some policies help pay settlements or court judgments after covered D&O claims resolve through negotiation, mediation, arbitration, or litigation, depending on policy terms.
Coverage varies by policy terms, conditions, and limits.
Common Exclusions
Intentional fraud
D&O policies generally exclude fraudulent conduct, criminal activity, or deliberate wrongdoing proven through final adjudication or legal determination.
Prior litigation
Claims involving lawsuits, investigations, or disputes known before policy inception may not be covered.
Insured disputes
Some insured-versus-insured exclusions limit coverage when directors, officers, or company entities sue each other internally. Exceptions sometimes exist for derivative actions or bankruptcy-related claims.
Illegal profit
Policies often exclude claims involving personal profit, financial gain, or compensation obtained unlawfully through misconduct or regulatory violations.
Varies by carrier and policy wording; some exclusions have exceptions.
Not sure what's excluded on your policy? Talk to an expert
24h
average time from application to proof of coverage
From application to Certificate of Insurance (COI), often in ~24 hours
Assess your unique risk profile
~10 min · one-time form
Complete a short digital intake form so we can understand your unique risk profile, your industry, stage, contracts, and exposures.
AI & brokers scan the market
Top-rated carriers compared
Our AI agents and licensed brokers scan the market's top-rated carriers to find the best quotes for your business.
Close the deal with proof of coverage
Vendor-ready in ~24 hours
We present the options that satisfy your vendor requirements and get you proof of coverage, so you can close the deal.
Assess your unique risk profile
~10 min · one-time form
Complete a short digital intake form so we can understand your unique risk profile, your industry, stage, contracts, and exposures.
AI & brokers scan the market
Top-rated carriers compared
Our AI agents and licensed brokers scan the market's top-rated carriers to find the best quotes for your business.
Close the deal with proof of coverage
Vendor-ready in ~24 hours
We present the options that satisfy your vendor requirements and get you proof of coverage, so you can close the deal.
FAQs about D&O Liability Insurance
Have questions about directors and officers insurance, startup eligibility, investor requirements, and policy structure? Every response is reviewed by our licensed brokerage team.
Getting started
What information do I need to apply?
Our 10-minute application will ask you for your fundraising history, capitalization details, board structure, revenue information, any prior claims, financial statements, hiring plans, and pending litigation disclosures. With these inputs, we identify the right D&O policy structure and carrier for your stage.
Underwriters also review investor concentration, cash runway, regulatory exposure, and international operations.
How fast can we get D and O insurance quotes?
With RiskCube, you can get D&O insurance quotes in one to two days. The exact timeline depends on your unique situation. After you've selected a policy, you'll get proof of coverage in ~24 hours.
Coverage basics
What is directors and officers insurance?
Directors and officers insurance, also called D&O liability insurance, protects founders and boards if they are sued over management decisions.
It safeguards founders, executives, and board members during claims from shareholders, investors, regulators, competitors, or employees.
What are Side A, Side B, and Side C in D&O liability insurance?
Side A protects individual directors and officers. Side B reimburses the company after indemnifying leadership. And side C protects the company itself during covered lawsuits.
Is directors and officers insurance the same as professional liability insurance?
No. D&O insurance aims to protect leadership after management-related claims. Professional liability insurance safeguards companies after service errors, negligence allegations, or client financial-loss claims.
When do startups need directors and officers liability insurance?
Most venture-backed startups need D&O as soon as they raise their first Pre-seed or Seed capital. Institutional investors increasingly require D&O as a closing condition in their term sheets, and board observers or independent directors won't take their seat until coverage is placed. The requirement gets more formal at Series A.
You may need D&O earlier if you're selling into federal government, regulated industries (fintech, healthtech, defense), or any enterprise customer whose MSA requires it.
Does insurance for directors and officers cover regulatory investigations?
D&O insurance includes coverage for certain regulatory investigations, but this all depends on policy wording and endorsement structure.
Does D&O insurance include employment-related claims?
Some D&O policies include limited employment-practices coverage. Others require you to have separate Employment Practices Liability Insurance (EPLI).
Founders should review whether allegations involving wrongful termination, discrimination, retaliation, or harassment require stand-alone employment-practices coverage. RiskCube can help you understand what's included and what's not.
Do D&O policies cover AI-related claims?
Most D&O policies respond to allegations about how leadership manages an AI company: fundraising representations, governance, hiring decisions. They don't typically cover the AI product itself causing financial harm to a customer; that's Tech E&O territory, or in some cases an emerging AI-specific policy.
RiskCube places both D&O and AI-aware Tech E&O so the coverage stack works together.
Cost & sizing
How much D&O insurance do startups need?
The amount of D&O insurance startups purchase will change depending on their fundraising stage and board composition, plus investor expectations and company risk profile. Seed-stage startups might purchase lower limits, while venture-backed companies with institutional investors or larger boards might need higher protection limits.
What affects directors & officers insurance coverage pricing?
D&O insurance coverage pricing is influenced by your fundraising stage, revenue, board structure, financial condition, claims history, and industry exposure. Underwriters might also look at layoffs, regulatory exposure, international operations, pending litigation, and past executive disputes before they issue terms.
AI & governance risk
What is "AI washing" and how does D&O respond?
AI washing is when a company overstates the role, sophistication, or performance of AI in its products, fundraising materials, or public disclosures. When the truth surfaces, through a missed earnings forecast, a short-seller report, a regulatory inquiry, or a customer complaint, shareholders sue, often naming founders and directors personally.
D&O is the policy that responds to these claims. RiskCube checks every AI-company policy for AI exclusions or sublimits before binding so you're not left exposed when the lawsuit lands.
What exclusions create problems during D&O claims?
Fraud exclusions, past litigation exclusions, and insured-versus-insured exclusions can lead to coverage disputes during D&O claims.
It's important to look at policy wording carefully because exclusions can have an impact on leadership protection during lawsuits or investor disputes. RiskCube makes the process of comparing policies easy and transparent, so you're not left in the dark.
Get D&O coverage without delays
Fundraising rounds, board appointments, and institutional partnerships stall when D&O coverage or proof of insurance is missing. RiskCube compares D&O policies from top-rated carriers side-by-side and binds investor-ready coverage within 24 hours of a completed application.
Y Combinator F24 
About the author
Andrei Craciunescu
Founder & CEO, RiskCube · CA License #4467994
LinkedIn ProfileAndrei previously worked in Risk & Analytics at WTW (Willis Towers Watson), one of the world's largest insurance brokers. He holds an M.Sc. in Mathematics from LMU Munich and conducted PhD-level research in risk and insurance modeling. His work focuses on translating risk data into actionable insurance coverage decisions for VC-backed startups and small-to-medium businesses across the U.S.