For a CFO, the best way to obtain D&O (Directors & Officers) insurance is usually to treat it as a strategic risk-management purchase, not just a commodity insurance buy. The process typically works best when you engage a specialized D&O broker, prepare a strong underwriting package, and negotiate coverage terms—not just price.
Recommended process
1. Hire a D&O-specialist broker
Look for a broker who regularly places D&O for companies like yours (private company, public company, nonprofit, venture-backed, PE-backed, etc.). Ask:
How many D&O policies do you place annually?
Which carriers do you have relationships with?
Do you negotiate policy wording, exclusions, retentions, and Side A protection?
Who will handle a claim if one occurs?
D&O is highly dependent on policy wording and negotiation, so broker expertise can materially affect the result.
Avoid having several brokers independently approach the market at the same time; insurers generally prefer a coordinated submission through one broker, and fragmented marketing can reduce negotiating leverage.
2. Prepare a strong underwriting package
Your broker will typically assemble a submission including items such as:
Completed D&O application
Financial statements (often recent audited or management financials, depending on company type)
Ownership/capitalization information
Organizational chart and subsidiaries
Board and executive information
Prior claims, litigation, investigations, or demand letters
A CFO can improve the outcome by making sure the financial story is clear:
revenue and growth trends
profitability or funding runway
debt position
major customers or concentration risks
pending transactions (M&A, financing, IPO plans)
3. Decide what coverage structure you actually need
A typical D&O policy has three main coverage components:
Side A: protects individual directors/officers when the company cannot indemnify them.
Side B: reimburses the company when it indemnifies directors/officers.
Side C: provides entity coverage in certain situations (scope varies by company type and policy).
Depending on your situation, you may also evaluate:
Employment Practices Liability (EPL)
Fiduciary Liability
Cyber-related management liability
Excess D&O layers
Side A Difference-in-Conditions (Side A DIC) coverage for additional individual protection
4. Get multiple carrier indications through the broker
The broker should approach appropriate D&O markets and compare:
Premium
Limits
Retention/deductible
Exclusions
Advancement of defense costs
Severability provisions
Change-of-control provisions
Prior acts/retroactive coverage
Choice of counsel provisions
Insurer financial strength and claims reputation
The cheapest policy is not always the best value if exclusions or restrictive wording create coverage gaps.
5. Involve the board and counsel
Because D&O protects directors and officers personally, many companies review the proposed program with:
the board or audit committee
corporate counsel
outside governance advisors (especially before financing, M&A, or an IPO)
6. Plan renewals early
Start renewal discussions roughly 90–120 days before expiration. Changes in:
financing
litigation
leadership
acquisitions
layoffs
regulatory issues
can significantly affect underwriting.
Questions I would ask a broker before hiring them
“What D&O limits would you recommend for a company of our size and risk profile, and why?”
“Which carriers would you approach for us?”
“What exclusions or endorsements should we push back on?”
“How would this policy respond if the company cannot indemnify directors?”
“Can you walk our board through the proposed program?”
If you share your company type (private/public/nonprofit), revenue or funding stage, industry, number of employees, and whether you have investors or a board, I can suggest what a typical D&O buying approach and coverage structure would look like for your situation.
For a CFO, securing Directors and Officers (D&O) insurance requires a strategic approach that balances comprehensive personal asset protection for leadership with fiscal efficiency for the corporation. Because D&O policies are complex and non-standardized, navigating the market effectively requires a structured process.
Engage a specialized broker : Do not go direct or use a general commercial lines broker if your company is scaling, venture-backed, or going public. Work with an experienced executive risk broker who specializes in D&O and understands your specific industry (e.g., tech, biotech, manufacturing). A specialized broker has direct relationships with top-tier D&O underwriters and knows how to create market competition.
: Work with your broker and legal counsel to map out the required insuring clauses:
ChatGPT Search· Sep 22, 2026
For a CFO, the best approach is usually not to buy the cheapest D&O policy directly online. Treat it as a risk-transfer/board-governance project and have a specialized executive-liability insurance broker run a competitive process across several carriers.
D&O is particularly technical because it is generally written on a claims-made or claims-made-and-reported basis, so continuity, reporting requirements, exclusions, and the retroactive/prior-acts date can matter as much as the headline policy limit.
A practical CFO playbook
1. Hire a broker who specializes in D&O
I'd interview 2–3 brokers, preferably ones that regularly place D&O for companies similar to yours rather than a general commercial-insurance agent.
Ask each broker:
Which D&O carriers would you approach for our company?
As a CFO, securing Directors and Officers (D&O) insurance isn’t just an administrative chore—it’s a core risk management exercise that protects your leadership team's personal assets and the corporate balance sheet. Navigating the market requires a structured, strategic approach to ensure you don't end up with expensive gaps in coverage.
The optimal, step-by-step process to secure a robust D&O policy involves the following key phases:
Securing Directors and Officers (D&O) insurance is a critical risk-management task. As a CFO, your goal is to balance robust personal protection for your board and executives with fiscal responsibility for the company.
The best, most strategic way to approach D&O procurement involves a structured, multi-step process:
Engage a Specialized, Expert Broker
Do not rely on fast, automated online quotes. Partner with an experienced executive liability broker who understands your specific industry (e.g., tech, biotech, non-profit, or manufacturing) and has deep access to major insurance markets.
A specialized broker will provide independent showing what companies of your size, stage, and sector are paying and the coverage limits they carry.
ChatGPT Search· Sep 18, 2026
For a CFO, the best approach is usually not to buy D&O directly from an online insurer. Treat it as a risk-management and capital-protection exercise: use a broker who specializes in executive/management liability, create a strong underwriting submission, solicit several insurers, and compare the actual policy wording, not just premiums.
A practical CFO playbook
1. Start with a specialist broker
Use an insurance broker with a dedicated D&O / management liability practice, rather than relying solely on the broker who handles your property, general liability, and workers' comp.
Ask the broker to approach several appropriate D&O markets and give you a side-by-side coverage comparison. D&O forms vary substantially between insurers, so price alone can be misleading.
For a private company, I'd specifically ask the broker:
As a CFO, securing Directors and Officers (D&O) insurance requires balancing comprehensive asset protection for your leadership team with cost efficiency for the company. Navigating the management liability market effectively involves a structured, strategic approach.
Here is the best step-by-step roadmap to secure the right D&O coverage:
Engage a specialized broker
Do not rely on a general commercial lines broker if you can avoid it. Partner with an experienced executive risk or management liability broker who understands your specific industry (e.g., tech, biotech, non-profit, or public) and has deep leverage in the D&O marketplace. They can provide vital peer benchmarking data on limits and retentions.
ChatGPT Search· Sep 14, 2026
For a CFO, the best way to obtain Directors & Officers (D&O) insurance is usually to run a structured broker-led process rather than simply buying a policy from your existing commercial insurance provider. D&O is a specialized product where policy wording, exclusions, insurer reputation, and claims handling can matter as much as premium.
A practical CFO playbook:
1. Decide what risk you need to cover
Start by defining your company profile:
Private company, public company, nonprofit, PE-backed, venture-backed?
D&O commonly protects directors and officers against allegations involving management decisions, fiduciary duties, regulatory issues, employment-related claims, and shareholder/investor disputes.
ChatGPT Search· Sep 10, 2026
For most companies, the best way for a CFO to buy D&O insurance is through a specialist management-liability insurance broker, run a competitive underwriting process, and have counsel review the actual policy wording before binding it. D&O is not a commodity policy where the cheapest quote is necessarily the best deal.
A practical CFO playbook
Start with a D&O-specialist broker
Ask your existing commercial insurance broker whether they have a dedicated D&O/management-liability practice. If not, interview 2–3 specialist brokers. D&O policies are highly non-standardized, and the broker's ability to negotiate exclusions and endorsements can matter considerably.
I'd want the broker to have experience with companies of your size, industry, ownership structure, and financing stage.
2. Give the broker a complete underwriting package
Google AI Mode· Sep 10, 2026
As a CFO, securing Directors and Officers (D&O) insurance isn’t just a routine corporate checkbox—it is a critical risk-management task that protects both the balance sheet and the personal assets of the executive team and board.
The most effective, methodical approach to procuring or renewing D&O insurance involves a structured roadmap:
Engage a Specialized D&O Broker
Do not rely on a general commercial lines broker if your company is scaling rapidly, prepping for a funding round, or going public.
Work with an experienced, specialized executive risk broker who understands current market conditions, D&O tower structures, and peer benchmarking specific to your industry.
Sources AI cites
8% of citations to these sources link to brands' own websites.
Determine your structural needs (The ABCs of coverage)
Side A : Protects individual directors and officers directly when the company cannot indemnify them (e.g., bankruptcy or corporate insolvency).
Side B : Corporate reimbursement; reimburses the company when it has indemnified its directors and officers for legal costs.
Side C : Entity coverage; protects the company itself for securities-related claims (crucial for public companies or those seeking heavy institutional funding).
Prepare a compelling underwriting submission : Underwriters look closely at your financial health, corporate governance, capitalization, and litigation history. Collaborate with your broker to present a clean narrative highlighting:
Recent financial statements, cash runway, and capital-raising history.
The strength and background of your board of directors and management team.
Risk management protocols, compliance procedures, and employee culture.
Go to market and create competition : Ask your broker to approach a broad spectrum of specialized carriers rather than renewing with the incumbent by default. Leverage multiple competing quotes to negotiate not just lower premiums, but superior policy terms and broader definitions of a "claim" or "wrongful act."
Negotiate critical policy enhancements (The fine print) : Rely on experienced corporate legal counsel alongside your broker to scrub the policy wording. Pay special attention to:
Severability clauses : Ensuring that one executive’s misrepresentation doesn't void coverage for innocent directors and officers.
Side A DIC (Difference in Conditions) drop-down coverage : Providing an extra layer of protection that responds if the primary limits are exhausted or corporate indemnification fails.
Broad definition of insureds : Ensuring past, present, and future directors, officers, and even employees acting in managerial capacities are covered.
To help tailor this strategy, could you share:
Is your company private, pre-IPO, or public?
Are you currently raising capital or facing specific investor requirements?
Who will negotiate the policy wording—not just the premium?
Will you provide a side-by-side comparison of the actual forms and endorsements?
Who handles claims if we actually have one?
The broker should be able to explain why they're recommending a particular policy, rather than simply presenting the lowest quote.
2. Give the broker a complete underwriting package
Have these ready:
Company description and organizational chart
Revenue and balance sheet information
Cap table / ownership structure
Number of employees
Geographic footprint
Prior D&O/EPLI/E&O coverage
Any claims, demand letters, litigation, or regulatory inquiries
Board composition
Financing history and current debt
Recent financing or acquisition activity
Contracts requiring D&O coverage
Whether you expect an acquisition, sale, IPO, or major financing
Current indemnification provisions in the bylaws/articles and D&O indemnification agreements
Be particularly careful about known circumstances and potential claims. D&O applications can contain representations that affect coverage, so have your General Counsel/outside counsel review the application before signing.
3. Decide what you're actually trying to protect
A good D&O program normally needs to address three different buckets:
Coverage
What it does
Side A
Protects individual directors/officers when the company cannot indemnify them
Side B
Reimburses the company when it indemnifies directors/officers
Side C
Provides entity coverage for claims against the company itself, subject to the policy's scope
That's a fundamental distinction in evaluating quotes.
For many companies, I'd pay particular attention to Side A protection rather than simply increasing the overall limit. A major claim can consume corporate coverage, potentially leaving individual directors and officers exposed.
4. Don't compare quotes on premium and limits alone
This is where CFOs can get into trouble.
Have the broker create a coverage comparison matrix showing, at minimum:
Policy limit
Retention/deductible
Side A limit
Side B limit
Side C coverage
Defense costs inside or outside the limit
Definition of "claim"
Definition of "wrongful act"
Insured-person definition
Entity definition
Prior/pending litigation exclusion
Insured-vs.-insured exclusion
Fraud/criminal conduct exclusion
Contract exclusion
Bodily injury/property damage exclusion
Employment-related exclusions
Regulatory/investigative coverage
Advancement of defense costs
Choice/control of counsel
Settlement consent provisions
Severability
Allocation
Discovery/extended reporting period
Change-of-control provisions
Bankruptcy protection
Retroactive/prior-acts date
Some of these provisions can produce enormous differences between policies that appear similar on the declarations page. The Insurance Information Institute likewise notes that D&O policies have important exclusions and that coverage varies according to the company's circumstances.
5. Pay special attention to the retroactive date
This is one of the most important issues for an existing company.
Suppose you buy D&O today but the policy says it only covers wrongful acts occurring after today's retroactive date. A claim filed next year concerning a board decision made two years ago could potentially fall outside the new policy.
If you're replacing an existing D&O policy, preserving the prior policy's retroactive/prior-acts date is extremely important. D&O continuity is a major issue precisely because these policies are claims-made.
If you're buying D&O for the first time, have the broker specifically negotiate the earliest/prior-acts date available and explain the implications.
6. Consider D&O together with EPLI and fiduciary liability
Don't let the D&O policy become a substitute for other executive-liability coverage.
Depending on your company, you may want a coordinated program containing:
E&O/professional liability — claims arising from professional services
Cyber — cyber/privacy/network exposures
These can overlap at the edges, so your broker should analyze the exclusions across the entire program rather than buying each policy independently.
7. Get your corporate lawyer involved before binding
I'd have counsel review the actual policy wording, particularly:
indemnification provisions,
Side A protection,
exclusions,
advancement of defense costs,
severability,
insured-vs.-insured provisions,
change-of-control provisions,
prior/pending litigation,
and claims-reporting requirements.
The NAIC specifically notes that D&O policies are generally claims-made and that the deadline for notifying the carrier about potential claims needs to be understood.
Then: Negotiate the final wording, bind coverage, and establish an internal procedure for immediately escalating potential claims to the broker/insurer.
And I'd put the D&O policy on an annual coverage review, not just an annual renewal. WTW similarly recommends annual reviews to ensure limits and coverage remain appropriate as the company's risk profile changes.
One important question
The right D&O structure is very different for a venture-backed private company, a PE-backed company, a family-owned business, and a public company.
If you tell me (1) private or public, (2) approximate revenue, (3) number of employees, (4) industry, (5) whether you have outside investors/PE/VC, and (6) whether you already have D&O, I can lay out a CFO-level D&O buying strategy, including what limits/retentions to consider, what provisions I'd negotiate hardest, and what information to give the broker.
Do not rely on a standard general liability agent or a quick online portal for complex D&O. Work with an independent, specialized broker who focuses on management liability and has strong relationships with top-tier D&O markets (look for carriers with an AM Best rating of A or better ). A good broker brings leverage, market intelligence, and advocacy during a claim.
Determine Your Ideal Structure (The "Sides")
Map out what level of protection your board and executives need across the standard insuring agreements:
Side A: Protects directors and officers personally when the company legally or financially cannot indemnify them (e.g., in bankruptcy).
Side B: Reimburses the company when it does indemnify the executives for legal costs and settlements.
Side C: Covers the entity (the company itself) for securities claims or certain regulatory/governance actions.
Tip: For private companies, ensure Entity Coverage (Side C) is broad enough to cover non-securities claims (like competitor, customer, or vendor lawsuits).
Prepare a Comprehensive Submission Package
Underwriters will scrutinize your financials, corporate governance, cap table, and business trajectory. Have your team assemble a clean package including:
Audited or reviewed financial statements (and notes on any cash burn or insolvency risks).
The corporate bylaws and indemnification provisions.
A fully detailed and accurate D&O application/proposal form signed off by legal counsel or the CEO/CFO. Disclosures must be precise to avoid rescission issues later.
Negotiate Critical Policy Terms & Extensions
Work with your broker and legal counsel to negotiate the fine print rather than just accepting the insurer’s standard specimen form. Key clauses to target include:
Severability: Ensuring that an intentional misrepresentation by one executive on the application does not void coverage for innocent directors and officers.
Broad Definition of Loss & Claim: Ensuring coverage extends to formal administrative and regulatory investigations, not just formal lawsuits.
Favorable Deletion of Pre-existing Exclusions: Minimizing broad bars against antitrust, intellectual property, or prior knowledge exclusions.
Evaluate Limits and Retention (Deductible) Structure
Balance the cost of the premium against your risk tolerance. Analyze whether you need a dedicated Side A Difference in Conditions (DIC) policy to sit on top for ultimate personal protection. Be clear on what your corporate retention (deductible) is for Side B/C versus Side A (which typically has a zero deductible for individuals).
Time the Market and Re-evaluate Annually
D&O pricing and appetite shift with economic cycles. Approach the renewal or new placement market roughly 90 to 120 days before the effective date to allow ample time for marketing the account across multiple carriers. If you are eyeing an IPO, acquisition, or major funding round, signal this early as it radically alters your exposure profile.
If you'd like to narrow this down, tell me:
Is your company private, pre-IPO, or public?
What is your approximate revenue or funding stage?
I can give you a better idea of typical market pricing benchmarks or critical exclusions to watch out for.
Understand and Structure the "Sides" of Coverage
A standard D&O policy is structured in parts, and you must evaluate how they interact:
Side A: Protects individual directors and officers personally when the company legally or financially cannot indemnify them (e.g., bankruptcy).
Side B: Reimburses the company when it does indemnify its directors and officers.
Side C (Entity Coverage): Protects the corporate entity itself for securities-related claims (crucial for public companies or those seeking heavy venture backing).
Strategy: Consider adding a Side A DIC (Difference in Conditions) policy, which drops down to protect individuals if the primary limits are exhausted or if corporate bankruptcy stays indemnification.
Map Your Company's Risk Profile & Prepare the Submission
Underwriters will scrutinize your financials, cap table, litigation history, regulatory environment, and growth trajectory (or upcoming funding/IPO plans).
Prepare a clear narrative. Clean financials, strong corporate governance, and transparency regarding past or potential headwinds will help your broker negotiate better terms.
Review Policy Breadth (It's Not Just About the Premium)
Avoid the trap of chasing the lowest premium. A cheap policy with severe restrictions leaves executives exposed.
Broaden definitions: Ensure the definition of a "Claim" goes beyond formal lawsuits to include regulatory investigations, extradition proceedings, and written demands.
Negotiate "severability"—ensuring that the misstatements or fraudulent acts of one executive do not void coverage for innocent directors and officers.
Evaluate Insurer Financial Stability
Check the carrier's financial ratings (look for an A.M. Best rating of A or better). A policy is only as good as the insurer's long-term balance sheet and willingness to pay out claims during a systemic downturn or corporate crisis.
Benchmark and Compare Multiple Options
Never accept a single direct quote. Require your broker to take specifications out to multiple competing carriers to leverage market competition for pricing and broad endorsements.
To help tailor this approach, could you share:
What stage is your company in (early startup, pre-IPO, mature private, or public)?
Are you looking to renew an existing policy or buy coverage for the first time?
What is the broker's relationship with the underwriters?
Can you negotiate manuscript endorsements?
Will you provide the full policy forms and endorsements, not merely a certificate/binder?
Who handles claims advocacy if there is a serious claim?
2. Prepare a high-quality underwriting submission
The quality of your submission can materially affect the process. Expect questions about things such as:
Revenue and financial statements
Cash/debt position and liquidity
Ownership structure and major shareholders
Number of employees
Directors and officers
Industry and geographic footprint
M&A activity
Capital raises or financing
Litigation and regulatory history
Employment practices
Any threatened or pending claims
Prior D&O coverage and claims
Expected changes over the next 12 months
Private-company applications commonly ask about management changes, ownership, M&A, financial information, employment practices and prior proceedings.
Important: involve your GC/outside counsel in the application. Anything that could reasonably become a claim should be disclosed appropriately. D&O is generally claims-made/claims-made-and-reported, making continuity and claim reporting particularly important.
3. Decide what you're actually trying to protect
Don't simply tell the broker, "Give us $5 million of D&O."
Think about the three basic coverage components:
Coverage
What it does
Side A
Protects directors/officers when the company cannot indemnify them
Side B
Reimburses the company when it indemnifies directors/officers
Side C
Provides coverage to the company itself for specified claims
That's the basic architecture of D&O.
For many companies, I'd have the broker quote both a conventional ABC policy and a separate Side A/DIC option. Side A/DIC can provide dedicated protection for individuals in circumstances such as insolvency or when the underlying policy cannot respond.
4. Don't focus only on the limit
A $5 million policy from Insurer A can be materially different from a $5 million policy from Insurer B.
Have your broker compare at least:
Policy limit
Retention/deductible
Side A limit and structure
Side B retention
Side C scope
Prior acts/retroactive date
Definition of "claim"
Definition of "wrongful act"
Defense-cost advancement
Choice of counsel
Consent-to-settle provisions / hammer clause
Insured-vs.-insured exclusion
Bankruptcy protection
Change-of-control provisions
Investigation coverage
Regulatory/subpoena coverage
Employment-practices coverage
Cyber/privacy exclusions
Contractual-liability exclusions
Fraud/criminal-conduct exclusions
Severability provisions
Discovery/extended reporting period
Runoff coverage following an acquisition or sale
These details can be more consequential than shaving 10% off the premium.
5. Pay particular attention to claims-made mechanics
This is one of the areas I'd want the CFO and GC to understand thoroughly.
D&O is generally written on a claims-made or claims-made-and-reported basis. That means the timing and manner of reporting can determine whether a claim is covered. WTW notes that reporting deadlines can be policy-specific and may require reporting during the policy period or within a specified period afterward.
I'd therefore ask the broker to demonstrate, in writing:
"If an issue arises today, when and how exactly do we have to notify the insurer?"
Also establish an internal procedure so that potentially reportable matters reach the CFO/GC and broker promptly.
6. Consider whether you need a broader management-liability program
Depending on the company, D&O shouldn't necessarily be purchased in isolation.
You may want the broker to evaluate:
D&O
Employment Practices Liability (EPL)
Fiduciary liability
Crime/fidelity
Cyber
Errors & Omissions / Professional Liability
Some private-company D&O programs can incorporate or coordinate several of these exposures, but you should understand where one policy ends and another begins.
Don't necessarily choose the lowest premium. Instead, have the broker identify the material coverage differences between the finalists.
The CFO/GC/board should be able to answer:
"What happens if our company gets sued, the company can't indemnify the directors, and the directors are personally named?"
That's where Side A, exclusions, limits and policy wording really matter.
What I'd ask the broker tomorrow
You could send them something as simple as:
"We're reviewing our D&O program and would like a competitive market exercise. Please approach several appropriate D&O carriers and provide side-by-side comparisons of limits, retentions, Side A/B/C structure, prior acts, entity coverage, investigation coverage, defense-cost advancement, choice of counsel, settlement provisions, key exclusions, severability, change-of-control provisions, and extended reporting/runoff options. Please also identify any material differences in policy wording between the proposals and provide your recommendation as to the appropriate structure and limits based on our risk profile."
One CFO-specific point
If your company is venture-backed/private equity-backed, preparing for an IPO, highly leveraged, acquiring companies, planning a sale, or has significant investor/board exposure, tell the broker that upfront. Those circumstances can materially affect both underwriting and the structure you want.
And if you're a public company, the analysis is considerably different from a conventional private-company D&O program.
If you tell me your company type (private/public/nonprofit), approximate revenue, number of employees, industry, ownership/funding (e.g. VC/PE/family-owned), and whether you're contemplating an acquisition/IPO/sale, I can lay out a CFO-level D&O buying checklist, suggested limits/retentions to request quotes for, and the specific policy clauses I'd negotiate.
Assess your risk profile and required limits
Evaluate your company's current stage—whether you are bootstrapped, seeking Series A/B funding, preparing for an IPO, or operating as a mature public company. Underwriting factors include your cash burn rate, revenue, capitalization, debt structure, and litigation history. Work with legal counsel and your broker to determine if you need Side A (protects personal assets when the company can't indemnify), Side B (corporate reimbursement), and Side C (entity coverage).
Prepare a compelling underwriting submission
Underwriters look closely at the financial health and governance of your firm. Gather clean, transparent documentation including:
The latest audited or reviewed financial statements and cash projections.
An up-to-date corporate organizational chart and cap table.
Details on board composition (investor representation, independent directors).
A completed, signed D&O application detailing any past or pending claims/threats.
Request and compare competing proposals (Side-by-Side)
Ask your broker to canvas multiple top-tier carriers. Do not just look at the bottom-line premium; scrutinize the policy form word-for-word. Compare key nuances such as:
Severability clauses: Ensuring one officer’s misrepresentation doesn't void coverage for everyone else.
Prior acts and pending/prior litigation dates: Ensuring no unexpected coverage gaps for historical actions.
Definition of Loss and Insured: Checking broad definitions that favor coverage execution.
Review carrier financial strength
Verify that the proposed insurance carriers have high financial stability ratings (e.g., A.M. Best ratings of "A" or higher). A cheap policy is worthless if the carrier lacks the liquidity to backstop a major shareholder or regulatory lawsuit.
Negotiate extensions and endorsements
Before binding, work with your broker to negotiate favorable endorsements. For instance, ensure provisions for Independent Director Liability (IDL) top-up limits or specialized coverage extensions for regulatory investigations are explicitly integrated if your sector warrants it.
To help tailor this strategy, could you tell me:
What stage is your company currently in (early startup, pre-IPO, public, non-profit)?
Are you looking to buy Side A only or a comprehensive ABC package bundled with EPLI/Crime?
Choose a broker with a dedicated management liability/D&O practice, not just a general commercial insurance broker. A strong broker should:
Know the D&O carrier market
Negotiate policy language, not just price
Advise on appropriate limits and retentions
Understand your industry’s litigation risks
Help during claims
Many companies use a specialist broker for D&O even if another broker handles property, casualty, or employee benefits.
3. Prepare a strong underwriting package
Expect insurers to request:
Completed D&O application
Current financial statements (often audited/reviewed if available)
Ownership/capitalization information
Board and officer list
Corporate governance documents
Litigation, claims, and regulatory history
Information on major transactions or pending changes
Accuracy matters because D&O applications include representations that become part of the insurance contract.
4. Run a competitive market process
Have your broker approach several appropriate carriers. Compare:
Limits (for example, $1M, $5M, $10M+ depending on company risk)
Retention (your out-of-pocket amount before coverage responds)
Side A coverage (personal protection when the company cannot indemnify directors)
Side B coverage (company reimbursement for indemnifying directors/officers)
Side C coverage (entity coverage, especially relevant for public companies)
Exclusions
Defense-cost treatment
Choice of counsel provisions
Regulatory investigation coverage
Coverage structure often matters more than the lowest premium.
5. Coordinate with your board and legal counsel
The board should understand:
Why the company is buying the coverage
Limits selected and why
Major exclusions
How D&O interacts with indemnification agreements and corporate bylaws
For many companies, D&O is part of a broader governance protection package.
6. Review annually — not just at renewal
A CFO should revisit D&O after:
Fundraising rounds
New investors joining
M&A activity
Significant layoffs
Regulatory inquiries
Material changes in financial condition
IPO preparation
These events can materially change underwriting and coverage needs.
Questions I would ask a D&O broker before hiring them
How many D&O placements like ours do you handle each year?
Which carriers are strongest for our industry?
What exclusions are you seeing in current quotes?
How would you benchmark our limits?
Which policy terms would you negotiate hardest?
How do your clients fare during claims disputes?
If you share your company type (private/public), industry, revenue range, employee count, funding status, and country/state, I can suggest a more tailored D&O procurement strategy and likely coverage structure.
Litigation, regulatory investigations and claims history
Existing insurance program
Indemnification provisions/bylaws
Details of any planned IPO, M&A transaction, or significant financing
Be extremely accurate about pending or known circumstances. D&O is generally written on a claims-made basis, so prior knowledge and claims reporting can become important coverage issues. Willis Towers Watson
3. Have the broker approach multiple quality carriers
Don't simply ask, "What's the cheapest $5 million policy?" Ask for a side-by-side comparison of coverage.
For a private company, the basic structure is usually:
Side A: protects directors/officers when the company cannot indemnify them.
Side B: reimburses the company when it indemnifies directors/officers.
Side C: provides coverage for claims against the company itself, subject to the policy's terms and exclusions.
Focus heavily on exclusions and definitions
This is where I would spend most of my time as CFO—not comparing premiums.
In particular, have your broker and counsel examine:
Prior/pending litigation
Fraud/criminal conduct wording
Insured-vs.-insured exclusion
Contractual-liability exclusion
Professional-services exclusion
Employment-related claims
Regulatory/investigative coverage
Cyber/privacy-related claims
Bankruptcy/creditor claims
Antitrust
Securities/private-placement exclusions
Change-of-control/M&A provisions
Definition of "insured person"
Definition of "claim"
Advancement of defense costs
Choice of counsel
Consent-to-settle/hammer clause
Severability of exclusions and applications
Allocation between covered and uncovered claims
Private-company D&O can provide relatively broad entity coverage, but that also means the exclusions deserve particular scrutiny.
One issue I'd particularly emphasize: Side A
If I were advising a CFO, I'd pay special attention to Side A protection, especially if the company could ever become financially distressed.
If the company cannot indemnify a director—for example, because of bankruptcy or legal restrictions—Side A can respond directly for the individual's covered loss.
For companies with meaningful outside investors or sophisticated boards, I would also ask the broker whether an excess Side A/DIC layer makes sense. These policies can provide additional protection specifically for directors and officers when the underlying D&O limits are exhausted or certain coverage problems arise.
How much coverage?
There isn't a universal answer. I'd have the broker model several alternatives rather than picking a limit based solely on revenue.
For example:
Option
Purpose
$1M–$2M
Basic/smaller-company protection
$3M–$5M
More substantial private-company program
$5M–$10M+
Companies with significant investors, board exposure, M&A activity, regulatory exposure, or substantial enterprise value
Those are illustrative ranges, not recommendations. The appropriate limit depends heavily on your balance sheet, ownership, industry, litigation exposure, number of directors, investor requirements, and transaction plans. Premiums also vary substantially with these factors.
Don't overlook the related policies
I'd have the broker quote D&O alongside:
EPL — Employment Practices Liability
Fiduciary liability — particularly if you have significant benefit plans
Cyber liability
Crime/fidelity
Errors & omissions/professional liability, if applicable
These cover different exposures and shouldn't be assumed to be interchangeable with D&O.
What I'd ask the broker
I'd literally send something along these lines:
"We're looking to conduct a competitive D&O placement. Please obtain proposals from several financially strong carriers and provide a side-by-side comparison of limits, retention, Side A/B/C structure, insured-person definition, major exclusions, investigation coverage, defense-cost provisions, severability, consent-to-settle provisions, change-of-control provisions, and any proposed endorsements. Please identify material differences in coverage—not just differences in premium."
Then have your corporate counsel review the finalists, particularly the exclusions, severability, indemnification interaction, and claims-made/prior-acts provisions.
Bottom line: For a CFO, I'd optimize for coverage quality + carrier quality + broker expertise, not lowest premium. D&O policies can look nearly identical on the declarations page while producing materially different outcomes when a claim occurs.
If you tell me (1) private or public, (2) approximate revenue, (3) industry, (4) number of employees, (5) VC/PE-backed or founder-owned, and (6) whether you're planning a financing/M&A/IPO, I can give you a much more specific recommendation on limits, Side A, likely retentions, carriers to consider, and exactly how I'd run the RFP.
Deconstruct and Optimize the "ABC" Structure
Ensure you understand and properly size the three core insuring agreements:
Side A: Protects individual directors and officers personally when the corporation cannot legally or financially indemnify them (e.g., bankruptcy). Consider a dedicated Side A Difference in Conditions (DIC) policy for extra buffer.
Side B: Reimburses the company for indemnifying the directors and officers.
Side C: Provides entity coverage for claims against the company itself (crucial for securities claims in public companies or co-defendant risks in private companies).
Evaluate Financial Health and Prepare the Submission
Underwriters will scrutinize your financials, cash burn rate, capitalization, pending litigation, and recent or anticipated structural changes (M&A, down rounds, or IPO prep).
Prepare a narrative that addresses potential red flags proactively rather than letting underwriters guess.
Calibrate Limit and Retention (SIR) Adequacy
Avoid blindly copying peer benchmarks based strictly on market cap or revenue. Evaluate your actual risk exposure (e.g., litigiousness of your industry, shareholder concentration, regulatory oversight).
Balance the size of the Self-Insured Retention (SIR) against your cash flow. Make sure your Side A limits match or exceed your corporate retention levels so that individual protection doesn't fail if the company refuses or is unable to pay the SIR.
Negotiate Broad Policy Terms and Severability
Review critical definitions, such as what constitutes a "Claim" and how broad the "Conduct Exclusion" is (it should only kick in after a final, non-appealable adjudication of deliberate fraud or illegal profit).
Ensure severability of the application—meaning one director's misrepresentation on the insurance application doesn't void coverage for innocent directors and officers.
To help tailor this strategy, what is your company's current stage (e.g., early-stage startup, scaling private company, or preparing for a public offering)?
