Being a corporate or nonprofit board member or director comes with its own unique set of challenges and liability risks. That’s why D&O insurance coverage is so important; it protects executives and directors from personal loss due to a lawsuit. Read our comprehensive guide below on why you need D&O coverage for your company or organization.

What is directors and officers (D&O) insurance?

Directors and officers coverage, or D&O, is a specialized professional liability insurance for corporate executives. These policies protect board members and directors from legal action in the case of financial loss during their time served with their company or organization.

What does D&O cover?

D&O insurance protects the personal assets of covered board members and directors of a corporation. This coverage extends to the executives’ spouses as well, and is activated when the insured party is sued for any perceived wrongdoing in their role within the company.

Examples of D&O coverage includes:

  • Fees for legal defense
  • Financial loss
  • Judgements and settlements

D&O coverage does NOT include:

  • Fraud
  • Criminal activity
  • Legal fees from a lawsuit from a fellow director or board member

Will D&O insurance cover former directors?

If the policy is still in place, then yes. Whether a former director is covered is based solely on if the policy remains active. Even if they no longer work at the business or organization they were originally insured under, their coverage can continue. However, this policy only applies to liability for the work they did while they were on that company’s board.

What does D&O coverage cost?

Most companies can expect to pay an average of $600 annually for D&O insurance. However, there are many variables that can affect the final cost:

  • Company’s age
  • Current business debt
  • Prior history of legal claims
  • Annual revenue

Is D&O coverage required?

D&O coverage is not required, but it is highly recommended for any company or organization with a board. If your company is looking to secure capital to grow or needs board members with experience, you may not reach those goals without D&O insurance.

Do nonprofits need D&O insurance?

Just like multi-million dollar corporations, nonprofit directors and board members have significant personal liability risk while performing their duties. Directors and board members of nonprofits are also more likely to have less experience than for-profit executives, leaving them vulnerable to making mistakes. Nonprofits of every size, big or small, need to have D&O coverage.


Don’t leave your directors and board members without the coverage they need. D&O insurance will ensure that no matter what happens, they will be protected and able to continue helping you run your company or organization in the best way possible.

The D&O specialists at JAISIN have years of experience with both large and small companies and nonprofits. They will help you examine your current policies for any holes in your coverage and search the market for potential savings.

Click or call JAISIN Insurance Solutions today to speak with one of our D&O insurance advisors for a quote today.

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