Directors & Officers (D&O) Insurance
D&O insurance protects the people who govern your company — founders, executives, and board members — from personal liability if they're accused of a wrongful act in how the company was managed or represented to investors, employees, or regulators.
D&O Insurance for Funded Software Companies
Directors & officers (D&O) insurance protects the personal assets of the people who run and govern your company from claims alleging a wrongful act in a management decision — mismanagement, breach of fiduciary duty, or misrepresentation to investors, employees, competitors, or regulators. Unlike Tech E&O or cyber liability, D&O isn't about the product; it's about the people making decisions at the top.
Who Can Bring a D&O Claim
- Investors: Alleging misrepresentation during a fundraise or a breach of fiduciary duty in board decisions
- Employees: Wrongful termination, discrimination, or other employment-practices claims naming individual executives
- Competitors: Allegations tied to unfair competition or how the company was represented in the market
- Regulators: Inquiries into corporate governance, disclosures, or compliance failures
- Creditors or acquirers: Claims that arise during a wind-down, restructuring, or M&A process
Why Investors Ask for It Before a Priced Round
Venture investors who take a board seat are personally exposed to the same categories of claims as your founders — which is why many term sheets and board-observer agreements make D&O coverage a condition of closing, particularly from Series A onward. Even before that stage, a D&O policy signals to investors and prospective board members that governance risk has been thought through, not ignored.
What D&O Does Not Cover
D&O does not respond to a claim that your product failed (Tech E&O) or that your systems were breached (cyber liability) — it responds to claims about how the company and its leadership were run. Larger, well-governed companies typically carry D&O alongside Tech E&O and cyber liability as three distinct legs of a technology company's liability program, each responding to a different category of claim.
What's Covered
Frequently Asked Questions
Do we need D&O insurance before raising a priced round?
Many investors expect it once they take a board seat, and some term sheets or board-observer agreements make it a condition of closing — commonly from Series A onward, though earlier-stage boards sometimes ask for it too. Even outside a fundraise, it protects your founders' personal assets from claims tied to how the company is governed.
What's the difference between D&O and Tech E&O?
Tech E&O responds to claims that your product or services failed a customer. D&O responds to claims about how the company itself was governed — decisions made by founders, executives, and board members. A funded software company typically needs both, since they cover entirely different categories of claim.