Directors and Officers: What is D&O Insurance?

Directors and Officers Insurance:  providing financial protection for the directors and officers of your company in the event they are sued in conjunction with the performance of their duties as they relate to the company. Think of Directors and Officers Insurance as a management Errors and Omissions policy.

4 Clauses of Directors and Officers Liability Insurance:

Side-A (Insuring Clause 1): provides coverage to individual directors and officers when not indemnified by the corporation (as a result of state law or financial capability of the corporation)

Side-B (Insuring Clause 2): provides coverage for the corporation when it indemnifies the directors and officers (corporate reimbursement)

Side-C (Insuring Clause 3): provides coverage to the corporation itself for securities claims brought against it

Side-D (Insuring Clause 4): provides for a $250,000 sublimit for investigative costs coverage related to a shareholder derivative demand

Why Directors and Officers Liability Insurance is necessary?

  • Protection for your directors and officers who are acting on behalf of the company from lawsuits that can be made by stockholders, employees, clients, etc.
  • Majority of directors and officers demand this coverage before accepting or performing on a job
  • In most cases investors and members of your board of directors will not be willing to risk their personal assets to serve as a director or officer
  • With employment practices suits is one of the largest claims and coverage against these suits is found with Directors & Officers insurance

When is a good time to buy D&O Insurance?

  • Whenever you are assembling a board of directors it is frequently required to have a current Directors & Officers policy
  • Evidence of the coverage must be presented to Investors, especially Venture Capitalists, before they invest, as a part of the terms and conditions
  • Having employees opens management up to risk for employment practices lawsuits, which can be covered under Directors & Officers insurance


You and your business already face many risks, but when those risks include legal claims and litigation, it is your directors and officers who often have the greatest exposure. That’s why The Rubin Group offers Business Insurance Solutions such as Directors and Officers insurance. It provides much needed protection against the costs of legal defense and indemnity coverage for the business, its employees, directors, and officers in suits alleging internal mismanagement.

If your organization is not prepared to financially absorb the potential costs of such litigation, then, as so many of your peers have discovered, D&O insurance is clearly a best alternative.

Pre-Planning Is Key. Contact Us Now.

Let Rubin’s Insurance specialists protect your assets and those of your employees. Call us for more information at (877) 806-7239