Directors & Officers

About Directors & Officers Coverage

Directors & Officers (D&O) policies first emerged from Lloyd’s of London in the 1930s to keep board members from losing their homes when fiduciary duties expanded and shareholder suits accelerated.¹

Federal securities reforms and the liability crises of the late 1970s pushed insurers to formalize Side A, B, and C agreements so non-indemnifiable directors, reimbursing entities, and securities defendants could each trigger the same tower, a structure we still rely on for Rockland County nonprofits, startups, and family enterprises.²

Modern filings now incorporate SEC cybersecurity disclosure mandates adopted in 2023 plus the elevated securities-class-action tempo Cornerstone Research tracked through mid-2024, so underwriters want to see board-level incident plans, ESG narratives, and derivative demand logs before releasing quotes.^3,4

Coverage Highlights

• Side A Non-Indemnifiable: Responds when individuals cannot be indemnified (bankruptcy, derivative suits), so their personal assets remain protected even if bylaws fall short.¹
• Side B Corporate Reimbursement: Repays the entity when it advances defense costs to its board, preventing a shareholder suit from draining operating cash.²
• Side C Entity Securities: Covers the organization itself when investors allege misstatements in an offering, so settlement dollars do not come straight out of retained earnings.³
• Side A Difference-in-Conditions: Drops down if the base tower is exhausted or rescinded, giving independent directors a separate limit when bankruptcy or fraud allegations block corporate indemnity.⁴
• Books & Records / Investigations: Funds legal counsel for subpoenas, derivative demands, or informal regulatory sweeps before a suit is filed, so you can cooperate without draining working capital.⁵
• Outside Directorship & Crisis Response:Extends coverage to executives serving on outside boards at the company’s request and reimburses PR consultants after headline-making allegations so stakeholder trust rebounds faster.⁶

Rising Costs

Cornerstone Research counted securities class-action filings at an above-average pace through mid-2024, with mega settlements keeping severity elevated, so carriers continue pricing to account for eight-figure defense and settlement scenarios even for private or nonprofit boards.¹

Fitch Ratings cautions that U.S. D&O combined ratios remain under pressure because social inflation and litigation funding keep loss costs high, so underwriters are holding firm on higher retentions and detailed financial disclosures.²

Regulators closer to home are also raising expectations: the SEC’s 2023 cybersecurity disclosure rule now requires boards to describe incident oversight, while the New York Department of Financial Services just tightened Part 500 so licensees document governance roles, meaning our local clients must prove board fluency with every renewal.^3,4

Cheaper Premiums

• Deliver full financials, ESG dashboards, and committee minutes at least 90 days ahead; Gallagher's 2024 Insurance Market Report notes that data-rich submissions are the first filter for carriers still willing to extend multi-year rate relief.¹
• Map the SEC cybersecurity disclosure workflow, identify who determines materiality, who signs Form 8-K updates, and how the board is briefed, so underwriters see that your governance process already mirrors new federal expectations.²
• Invest in independent director recruiting and continuing education; PwC's 2024 Annual Corporate Directors Survey links robust training programs to stronger risk oversight, which we highlight in carrier narratives.³
• Layer Side A-only or difference-in-conditions segments above higher Side C retentions so individuals stay protected while entity premiums drop, a structure AIG highlights for clients balancing budget and governance needs.⁴

What We Do

We secure tailored Directors & Officers insurance policies that align with your organization's unique needs. Our agents work closely with you to understand your risk profile, governance structure, and industry challenges. We leverage our network of carriers to find competitive quotes and optimal coverage terms. From initial risk assessments to finalizing your policy, we guide you through every step of the process, ensuring you have the protection necessary to safeguard your leadership team and organization.