Insurance Due Diligence for VCs
Know a company's real insurance posture before you wire, and fix what's missing before or after you invest.
Uncovered risks and bad policy terms silently increase your deal's downside. RiskCube runs end-to-end insurance due diligence for VC and growth funds: we read the actual policies, expose hidden gaps, and fix coverage before or after you wire.
Built for any investor writing a check, from Seed to IPO
Deep-tech & frontier funds
AI, space, and defense-tech targets carry non-obvious exposures (algorithmic liability, launch/aviation risk, ITAR/CMMC compliance) that a generalist insurance review misses entirely.
Seed to pre-IPO investors
At every stage, D&O, IP, and enterprise-contract exposure grows, limits rarely match the round, and your own board-seat liability is on the line. The specific gaps shift as the company scales, but the diligence question does not.
Growth & platform teams
Funds that want one repeatable insurance-diligence workflow across every deal and the whole portfolio, not a scramble per company.
Why insurance is a diligence blind spot
Insurance is a real asset on the company's balance sheet, but it rarely gets diligenced like one. Financial, legal, tech, and market all get a close look. Insurance usually gets one question ("do they have it?") and a one-page certificate nobody reads past the dollar amounts. If the coverage is thin or the terms are wrong, that asset is worth less than it looks, and your downside is bigger than the deal memo says. A few of the gaps we find most often:
The D&O won't protect you
The company has directors and officers coverage, but a fine-print exclusion cancels it out for exactly the kind of claim an investor or board member would face.
It doesn't cover the past
The D&O policy only covers decisions made after it started, so anything the company did before you invested is unprotected, even if the problem surfaces later.
A deal can quietly kill the coverage
When a company is acquired or takes a controlling investment, its D&O policy can shut off at close. If no one buys "tail" coverage to keep protecting the old board, that gap is on the table the moment the deal closes.
There are claims you can't see
The claims history shows open or unreported problems that eat into the available limits, or that an old policy may not even pay.
The coverage doesn't meet customer requirements
A defense-tech company is winning contracts but its insurance doesn't satisfy what the big primes demand, so every one of those deals is at risk.
The insurer may not be able to pay
Coverage is placed with a carrier that isn't financially rated, so its certificates get rejected by enterprise and government buyers, and the policy may not pay out on a real claim.
None of this shows up on a one-page certificate. Any one of them can become an uninsured loss big enough to threaten the company's survival, force an unplanned capital call, or dent your fund's return, and you only find out after the money is in.
What insurance due diligence covers
The scope of the review mirrors the professional insurance-due-diligence framework (policy structure, claims exposure, transaction-triggered issues) adapted for a venture context.
Coverage adequacy and limits
Are the right lines in place (D&O, Tech E&O, Cyber, GL, Product, Workers' Comp, plus Property, Auto, and Environmental where operations warrant, and sector-specific aviation, hull, UAS, and launch cover for space and defense hardware) at limits and retentions scaled to the company's stage, revenue, contracts, and sector? For solo-founder or founder-dependent companies, we also check for Key Person life coverage.
Policy quality and exclusions
We read the actual policy forms, not the certificate, checking the named insured, retroactive dates, claims-made vs. occurrence triggers, and the exclusions (war and weapons, AI carve-outs, major-shareholder, insured-vs-insured) that quietly remove the coverage that matters.
Claims history & exposures
We review loss runs for pending, threatened, or unreported claims, whether they were reported correctly, whether they erode available limits, and whether the company's coverage will actually respond.
Transaction-triggered issues
Will a change-in-control provision terminate D&O at close? Is run-off / tail coverage needed for the outgoing board? Does the existing insurance follow the liabilities under the deal (a point we flag for your counsel)? Where the deal needs it, we note tools such as representations & warranties, tax-liability, litigation, or cost-cap cover.
Your board seat
The day your partner takes a board seat, their personal assets are exposed. We confirm whether your board designees are named insureds under the company's D&O, assess Side-A / difference-in-conditions adequacy, and can arrange dedicated Outside Directorship Liability (ODL) coverage for the partners taking seats.
Carrier financial strength
Are policies placed with AM Best-rated carriers that enterprise and government buyers will accept, and that can pay a large claim?
Sector & contract compliance
Sector-specific exposure (ITAR/EAR and DFARS/CMMC for defense; data and privacy for AI and fintech) and whether coverage satisfies the company's customer and flow-down requirements.
How it works
Three steps, matching how the rest of RiskCube works: share the info, we review, you get the result.
Info: share the target
Send us the company and its insurance documents (policies, loss runs, and the contracts that drive requirements), or introduce us to the founder. One secure intake, no long questionnaire for your team.
Review: we read the actual policies
Our licensed brokers assess the program against the deal, reading the real policy forms, checking limits, retentions, retroactive dates, exclusions, claims history, and transaction-triggered issues, and benchmarking against comparable companies.
Result: your diligence read, and the fix
You get a concise, investor-ready summary: what is covered, the gaps and exclusions we find, the red flags, open claims, carrier quality, and the coverage the company needs, with an estimated cost to remediate. When you're ready, we arrange that coverage before or after close: one application, 40+ AM Best-rated carriers, and a COI in as little as 24-48 hours.
What you get
A clear, investor-ready insurance due-diligence read on the target.
- Coverage-by-coverage adequacy and limits vs. the company's stage, contracts, and peers
- Material exclusions, red flags, and policy-structure issues (named insured, retroactive dates, triggers) in plain language
- Claims history and open or unreported exposures
- Transaction-triggered issues (change-in-control termination, run-off / tail need)
- Your board designees' D&O / Side-A protection, and whether ODL coverage is needed
- Carrier financial-strength check
- Recommended coverage and an estimated cost to remediate, before or after close
Fast enough to inform a live deal, with a direct path to fix what it finds. It is a point-in-time insurance and risk-transfer assessment based on the documents provided, not investment, legal, tax, or audit advice. Funds use it alongside their own counsel and advisers for the investment decision.
Why RiskCube
RiskCube is an independent, licensed insurance brokerage built for the exact companies VCs back: AI, space, defense, fintech, and frontier tech. Our founder spent years in Risk & Analytics at WTW (Willis Towers Watson); the firm is a Y Combinator (F24) company and an AI NATION portfolio startup. We compare coverage across 40+ AM Best-rated carriers, and we understand the non-obvious exposures (algorithmic liability, aviation/UAS risk, ITAR/CMMC flow-downs) that a generalist review misses. Because we can both run the review and arrange the coverage, a gap we find on Monday can be a bound policy by close.
Diligence is where the relationship starts
Once you invest, RiskCube becomes the coverage partner for the portfolio company: one application, 40+ carriers, fast COIs, and a broker that already understands the company from diligence. For platform teams, that means a repeatable insurance workflow across every deal, and coverage that scales with each round, instead of a founder-by-founder scramble.
Frequently asked questions
What does insurance due diligence for a VC involve?
It is an expert review of a target or portfolio company's insurance program before or after you invest. RiskCube checks whether the right coverages are in place at limits scaled to the company's stage and contracts, reads the actual policy forms for exclusions and structure issues (named insured, retroactive dates, claims-made triggers) that remove protection investors rely on, reviews the claims history for open or unreported exposures, flags transaction-triggered issues like change-in-control termination and the need for run-off coverage, confirms carriers are financially rated, and checks that coverage satisfies customer and regulatory requirements. You get a concise read and a path to fix any gaps.
How is this different from a normal certificate check?
A certificate of insurance is a one-page summary that shows limits but hides exclusions, endorsements, claims history, and carrier quality. RiskCube reads the actual policy forms and assesses them against the company's stage, contracts, and sector, surfacing the gaps a certificate cannot show.
Do you review coverage before or after we invest?
Both. We run the review during diligence so you can price and negotiate the risk before you wire, and we arrange the recommended coverage before or after close, whichever fits the deal.
Can a deal actually terminate the company's insurance?
Yes. Many D&O policies contain a change-in-control provision that converts or terminates coverage when a company is acquired or takes on a controlling investment, which is why run-off (tail) coverage for the prior board is often needed at close. We flag this as part of the review.
What protects our partner personally when they take a board seat?
The portfolio company's D&O policy, if it names your designee as an insured and its Side-A cover is adequate. As part of the review we confirm both, and where there is a gap we can arrange dedicated Outside Directorship Liability (ODL) coverage so your partner's personal assets are not exposed by the seat.
Does RiskCube also arrange the coverage it recommends?
Yes. RiskCube is a broker, so a gap we identify in diligence can be placed with the right carrier before or after close, one application across 40+ AM Best-rated carriers. Legal questions about how the insurance transfers under the purchase agreement are for your counsel; we coordinate with them.
Is RiskCube giving investment or legal advice?
No. RiskCube is a licensed insurance brokerage. We provide an insurance and risk-transfer assessment, not investment advice, legal advice, or an audit opinion. Funds use our read alongside their legal, financial, and technical diligence.
Which sectors do you cover?
The companies VCs back: AI, space, defense-tech, fintech, SaaS, and frontier hardware, including the non-obvious, hard-to-place exposures (algorithmic liability, aviation/UAS, ITAR/CMMC compliance, launch risk) that generalist brokers and reviewers miss.
Diligence a deal, or cover your portfolio
Whether you're assessing a target before you wire or getting a portfolio company properly covered after, RiskCube gives your fund an expert insurance read and a fast path to fix what it finds.
CA License #6017028 · NPN 21694336 · Independent brokerage · Y Combinator F24. RiskCube is a licensed insurance brokerage providing an insurance and risk-transfer assessment only, not investment, legal, tax, or audit advice. Funds should rely on their own counsel and advisers for the investment decision.
About the author
Andrei Craciunescu
Founder & CEO, RiskCube · CA License #4467994
LinkedIn ProfileAndrei previously worked in the Risk & Analytics division of WTW (Willis Towers Watson), one of the world's largest insurance brokers and a recognized leader in space and defense risk. He holds an M.Sc. in Mathematics from LMU Munich and conducted PhD-level research in financial mathematics at the Technical University of Munich (TUM). 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.