Protect your company's leadership from personal liability. D&O insurance shields directors, officers, and managers from claims arising from their business decisions and management actions.
D&O policies typically have three coverage parts: Side A covers individual directors/officers when the company cannot indemnify them; Side B reimburses the company when it indemnifies executives; Side C covers the entity itself for securities claims.
When a claim arises—such as a shareholder lawsuit or regulatory investigation—the affected directors or officers report it to the insurer immediately. Early reporting is critical for claims-made policies.
The insurer provides legal defense through approved counsel experienced in executive liability. Defense costs are typically covered from the first dollar, though some policies have retention amounts.
The policy covers settlements negotiated by defense counsel and judgments up to policy limits. Many D&O claims settle before trial due to the personal exposure executives face.
D&O coverage follows the individual, protecting executives even after they leave the company. Extended reporting periods (tail coverage) can extend protection for claims arising from past decisions.
Washington State does not legally require D&O insurance, but corporate governance best practices and investor expectations often make it essential for growing businesses.
Nonprofit organizations in Washington face particular exposure since board members often serve without compensation but still face personal liability. D&O coverage is critical for recruiting quality board members.
Washington corporations can include indemnification provisions in their bylaws, but corporate indemnification has limits. D&O insurance fills gaps when the company cannot or will not indemnify.
Venture capital and private equity investors in Washington typically require D&O coverage as a condition of investment. This protects both their appointed board members and their investment.
Washington's consumer protection laws and regulatory environment create exposure for company officers. D&O coverage helps defend against state regulatory actions.
Company size and revenue—larger organizations with more complex operations face greater exposure
Industry sector—some industries face more shareholder litigation and regulatory scrutiny
Financial condition—companies in distress or with volatile financials present higher risk
Claims history—prior D&O claims significantly impact availability and terms
Corporate governance practices—strong governance and compliance programs are viewed favorably
Board composition—experienced, independent board members may reduce risk perception
Coverage limits and retention—higher limits and lower retentions affect the policy terms
Get a personalized quote to see exactly what d&o costs for your business.
Get Your QuoteSee how d&o protects Washington businesses in actual claim scenarios.
Shareholders of a Seattle tech company sue the board of directors, alleging they approved an acquisition at an inflated price that destroyed shareholder value. Directors face personal liability claims totaling $2 million.
D&O insurance covers the legal defense for each named director and ultimately pays the settlement. Without coverage, directors would face personal financial devastation.
A Tacoma nonprofit's board is sued by a former employee claiming wrongful termination and discrimination. The lawsuit names individual board members who approved the termination decision.
D&O coverage provides defense for each board member named personally. The policy covers legal fees and settlement, protecting volunteer board members from personal liability.
Washington State regulators investigate a company for potential consumer protection violations. Officers are called to testify and face potential personal liability for company practices they oversaw.
D&O insurance covers the executives' legal representation during the investigation, including preparation for testimony and defense against any resulting personal claims.
D&O insurance typically covers current, former, and future directors and officers of the organization. Many policies also extend coverage to employees acting in a managerial capacity. Spouses may be covered for claims arising from jointly-held assets. The policy definitions section specifies exactly who qualifies as an "insured person."
Many small business owners serve as both shareholders and directors/officers, which can create unique liability exposure. If you have outside investors, a board of advisors, or plan to seek funding, D&O coverage becomes more important. Even family-owned businesses may need D&O to protect family members serving as officers from business-related claims.
General liability covers bodily injury and property damage claims—physical harm. D&O covers financial harm claims arising from management decisions—breach of duty, mismanagement, or misleading statements. A customer who slips and falls needs GL coverage. A shareholder who claims executives made poor business decisions needs D&O coverage. They protect against entirely different types of risk.
Side A directly covers individual directors and officers when the company cannot indemnify them (e.g., if the company is bankrupt). Side B reimburses the company when it does indemnify executives. Side C (entity coverage) covers the company itself for securities claims. Most policies include all three, though limits may differ.
Traditional D&O policies may cover employment claims like wrongful termination when they name executives personally. However, comprehensive employment practices coverage typically requires a separate Employment Practices Liability (EPLI) policy. Some D&O policies include EPLI endorsements. Review your policy carefully to understand employment-related coverage.
This is when D&O coverage matters most. If the company is acquired, the policy typically continues for a discovery period for claims arising from pre-acquisition acts. In bankruptcy, Side A coverage (direct coverage for individuals) becomes critical since the company can no longer indemnify executives. Tail coverage may be needed to extend protection.
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