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Directors and Officers Insurance (D&O)

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Spotlight on: D&O Insurance

From publicly traded companies to nonprofit organizations, all companies with directors and officers face some form of professional liability exposure.

Designed for these risks, directors and officers (D&O) is a specialized form of liability insurance that protects corporate directors and officers against claims, often made by stockholders, customers and employees, alleging financial loss arising from mismanagement.

D&O claims are usually paid directly to the directors and officers and their organization to help cover financial losses and legal defense costs incurred from a lawsuit. 

In addition to liability coverage for your organization, a D&O policy can also offer two other key protections:

  • Reimbursement for your organization when it is legally obligated to indemnify directors and officers of a company for their acts.
  • Direct coverage to covered directors and officers when your organization is not legally obligated to indemnify them.


The Higginbotham Difference: Keeping Your Leaders Leading

At Higginbotham, we set ourselves apart with our consultative approach to insurance services.

From enterprise organizations seeking entity coverage to individual leaders looking to better manage their personal liability, we take the time to learn you by name and nuance so we deliver a policy that fits your needs. If you decide D&O is a good fit, we proactively advocate in your best interest, getting you the most competitive prices available.

And our work doesn’t stop there.

After your coverage is placed, the true work begins. Our seasoned team of risk management professionals provide year-round value with our Day Two Services®.

Because while insurance is our something, our customers are our everything.

To learn more about how our values-based approach drives value for you and your business, click here.

Or visit our Insights page to learn more about director and officer risk management.

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Ready to work with a partner who works as hard as you do?

Doing the work to design a D&O insurance plan that fits your needs can seem like a tall order. Not with us in your corner. With our nationwide network of insurance carriers and deep industry experience, we’ll get you the custom coverage you need.

Talk to a seasoned directors and officers insurance specialist.

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Higginbotham is more than just another insurance company.  They are a trusted solutions-driven partner highly dedicated to helping their clients find the right options for their individual needs. 

Carrie B.
Program Manager, Engineering Industry

What does D&O insurance cover?

Directors and officers insurance is designed to help protect people who serve as a director or officer of both for-profit and nonprofit organizations.

Also known as “management liability insurance,” a D&O policy helps shield these individuals against the risk of personal losses from lawsuits alleging wrongful acts or illegal business activities. It can also extend coverage to the business or nonprofit they work for, helping with the cost of legal defense, settlement payments and more.

In most cases, criminal, civil and regulatory allegations are eligible for defense coverage. However, most D&O policies have exclusions for judgments or settlements arising from these allegations and claims involving property damage or bodily injury.

While it won’t cover liability for fraud or criminal misconduct, directors and officers insurance can safeguard against unintended transgressions and some forms of negligence.

In most cases, D&O can help pay for expenses incurred from eligible claims including:  

  • Settlements
  • Legal Judgements
  • Legal Defense

D&O insurance can be complex and often includes clauses and exclusions to prevent exploitation. One example known as an “insured vs. insured” clause prevents a former director or officer of an organization from suing at a later date in hopes of minimizing the chances of collusion against the carrier.

With this considered, we recommend discussing your needs with a seasoned insurance specialist before purchasing a policy.

How does directors and officers insurance work?

While some similar insurance policies cover a specific person, directors and officers policies are usually purchased by an organization to cover all directors and officers it employs. Directors and officers insurance can be tailored to fit various needs and risk exposures, with a few standard perils that almost every policy covers.

These can include lawsuits filed on the grounds of:

Stock Performance

Financial Performance

Decisions Made Outside of Authority

Mismanagement or Dereliction of Fiduciary Duties

Improper Employment or Management Practices

Cyber Breaches Caused by Negligence

Misrepresentation in a Prospectus

Regulatory Non-compliance 

Some examples of common exclusions include:

Fraud (requires final adjudication)

Property Damage

Claims Involving Prior or Pending Litigation

Illegal Compensation or Personal Profit (requires final adjudication)

Bodily Injury




Do I really need directors and officers insurance?

Regardless of the specific risks faced by your company leadership, any individual who serves as the director or officer of a nonprofit or for-profit organization would be wise to consider D&O insurance.

If your organization has a board of directors or employs officers in any capacity, you should explore this coverage.

Because some states have laws allowing the personal assets of directors and officers to be awarded in a lawsuit, D&O insurance can be a crucial protection. In addition to helping cover the costs of legal defense and settlement payments for your organization, maintaining this coverage can also aid in recruiting efforts, as most top talent wouldn’t consider working for an organization that doesn’t carry it.

Risk Management Services

At Higginbotham, we take a consultative approach to customer service and risk management.

Whether you have a single policy, a commercial package or many insurance policies covering multiple locations and risks, we take the time to understand your unique needs so we deliver the best coverage at the best price available.

But we don’t stop there.

Our work continues 365 days a year. We have a Day Two Services® team that works in tandem with our risk management specialists to deliver year-round value.

From help with compliance to safety audits and claims advocacy, our Day Two Services® team helps you mitigate risks, avoid costly claims and better position your operations so you can focus on what matters most: growing your business.

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Not sure where to start? Talk to someone who wants to listen.

A great plan starts with a conversation. Let’s talk about what you need.

Talk to a Directors and Officers Specialist

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