Directors & Officers Liability Insurance
Directors and officers make decisions that can create personal liability, corporate liability, or both. D&O insurance is designed to help protect the individuals who lead an organization and, depending on the policy and the claim, the organization itself from covered claims alleging wrongful acts in the management of the company.
The challenge is that D&O insurance is not one product for every company. A privately held business, a publicly traded company, a special purpose acquisition company, and a private company preparing to enter the public markets can face materially different exposures. The insurance structure, policy wording, limits, retentions, exclusions, reporting requirements, and transaction provisions should reflect those differences.
Churchwell Insurance Agency is a veteran-owned boutique independent agency with an Executive Liability Team focused on complex management and professional liability risks. We work with private companies, microcap and small-cap public companies, SPAC teams, de-SPAC transactions, and companies preparing to go public. Our approach combines access to more than 100 insurance markets with the direct, personalized service of a specialized boutique agency.
Choose the D&O program that matches your company.
Public Company D&O Insurance
Public companies face securities litigation, derivative claims, shareholder demands, regulatory investigations, disclosure allegations, merger and acquisition claims, bankruptcy exposures, and other risks that are fundamentally different from many private-company claims. Public-company D&O programs commonly involve Side A, Side B, and Side C coverage, as well as excess and Side A Difference-in-Conditions options.
Private Company D&O Insurance
Private-company D&O can respond to claims by investors, lenders, customers, vendors, competitors, employees, and other parties alleging wrongful management decisions. The right program depends on ownership, capitalization, industry, employment practices, contracts, M&A activity, and the company’s broader management liability exposures.
SPAC D&O Insurance
A SPAC has a unique lifecycle from formation and IPO through target search, proposed business combination, de-SPAC closing, or liquidation. D&O planning should account for the SPAC entity, its directors and officers, the sponsor relationship, transaction disclosures, possible extensions, and the transition to runoff when the business combination closes.
De-SPAC and Going-Public D&O Insurance
For a private operating company, a de-SPAC or other public listing changes the risk profile quickly. Existing private-company D&O, predecessor exposures, runoff coverage, and the new public-company D&O program should be coordinated so the company and its leadership understand which policy is intended to respond to which period of risk.
Why policy language matters.
Premium is important, but it is only one part of a D&O decision. Allocation language, conduct exclusions, severability, insured-versus-insured provisions, prior acts language, investigation coverage, advancement of defense costs, bankruptcy provisions, change-in-control language, reporting requirements, and Side A protections can materially affect how a program responds after a claim occurs.
Churchwell evaluates D&O programs with an emphasis on both economics and contract terms. For select public companies, Churchwell may also make a more detailed coverage review available through a recognized D&O coverage attorney, subject to eligibility and engagement terms.
Built for companies that want specialized attention.
Large national brokerages can be the right fit for some organizations. Churchwell is built for companies that value direct access, responsiveness, market knowledge, and a team that spends substantial time in executive liability and public-company risk. We believe sophisticated D&O advice should not be reserved for the largest companies in the market.
Talk with Churchwell’s Executive Liability Team about the D&O structure that fits your company, leadership team, transaction, and risk profile.
D&O FAQ
What is directors and officers liability insurance?
Directors and officers liability insurance, commonly called D&O insurance, is designed to protect directors, officers and, depending on the policy, the organization against covered claims alleging wrongful acts in the management of the company. A D&O program can respond to defense costs, settlements and other covered loss, subject to the policy terms, exclusions, limits and retention. The structure needed by a private company can differ materially from the structure needed by a publicly traded company.
What is the difference between public-company and private-company D&O insurance?
Public-company D&O is built around exposures that can include securities claims, shareholder litigation, derivative actions, regulatory matters, public disclosures and claims involving the company’s securities. Private-company D&O generally addresses a different mix of management-liability exposures involving owners, investors, employees, customers, competitors, lenders and other stakeholders. A company preparing to enter the public markets should review that transition well before the transaction closes.
What are Side A, Side B and Side C D&O coverage?
Side A generally protects individual directors and officers when the company cannot legally or financially indemnify them. Side B generally reimburses the company when it indemnifies directors and officers for covered claims. Side C provides entity coverage for defined claims against the company itself. For public companies, Side C is commonly tied to securities claims. The exact scope depends on the policy wording.
How much D&O insurance should a company buy?
There is no universal limit that is right for every company. Limit selection should consider company size, market capitalization, balance sheet, industry, ownership structure, claims history, transaction activity, peer purchasing, securities-litigation exposure and the board’s risk tolerance. For public companies and companies going public, Side A protection and the structure of the excess tower should be evaluated separately from simply selecting a total limit.
Does D&O insurance cover every claim made against a director or officer?
No. D&O policies are contracts with defined insuring agreements, exclusions, conditions, retentions and reporting requirements. Coverage can turn on details such as who is an insured, when the alleged wrongful act occurred, when the claim was made, whether notice was timely, the type of relief sought and the wording of exclusions or endorsements. That is why policy language matters as much as price.
When should a company review its D&O program?
At a minimum, D&O should be reviewed at each renewal and whenever the company’s risk profile changes materially. Events that should trigger an additional review can include an IPO, de-SPAC, uplisting, cross-listing, direct listing, major financing, acquisition, change in control, bankruptcy concern, significant litigation, regulatory inquiry, leadership change or rapid change in market capitalization.
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