D&O Insurance Calculator
Estimate Directors and Officers (D&O) liability insurance premiums based on company size, industry, risk factors, and coverage limits.
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About This Calculator
Directors and Officers (D&O) liability insurance protects corporate leaders from personal liability arising from their business decisions. When shareholders, regulators, employees, or other parties sue company leadership for alleged wrongful acts, D&O insurance covers defense costs and settlements. Every company with a board of directors or officers should understand this critical protection.
What D&O Insurance Covers:
- Lawsuits alleging breach of fiduciary duty
- Securities fraud claims (for public companies)
- Employment practices claims (in some policies)
- Regulatory investigations and proceedings
- Derivative lawsuits by shareholders
- Defense costs even when claims are unfounded
Who Needs D&O Insurance:
- Public companies (essential for securities liability)
- Private companies with outside investors
- Nonprofits with board members
- Startups raising venture capital
- Any organization with a governing board
Why D&O Insurance Matters:
- Directors and officers face personal liability
- Defense costs alone can be devastating
- Talented board members won't serve without coverage
- Investors often require it as condition of funding
This calculator estimates D&O insurance premiums based on your company profile. For general business insurance, see our Workers' Comp Calculator. For business valuation, visit our Business Valuation Calculator.
How to Use the D&O Insurance Calculator
- 1Select your company type (private, public, nonprofit, or startup).
- 2Choose your industry risk level based on your business sector.
- 3Enter your company's annual revenue.
- 4Input your total company assets.
- 5Enter the number of employees.
- 6Input how many years your company has been in business.
- 7Select your desired coverage limit.
- 8Choose your preferred deductible amount.
- 9Indicate any prior D&O claims and publicly traded securities.
- 10Review the estimated annual premium range.
Understanding D&O Insurance Coverage
D&O policies have three main coverage components known as "Sides."
Side A Coverage
What It Protects: Individual directors and officers when the company cannot or will not indemnify them.
When It Applies:
- Company is insolvent/bankrupt
- Indemnification legally prohibited
- Company refuses to indemnify
Key Features:
- Protects personal assets
- No deductible typically
- First line of defense for individuals
- Essential for attracting board members
Side B Coverage
What It Protects: Reimburses the company when it indemnifies directors and officers.
When It Applies:
- Company pays for D&O defense
- Company pays settlements on behalf of D&O
- Company legally required or chooses to indemnify
Key Features:
- Protects company finances
- Subject to policy deductible
- Most common type of claim
Side C Coverage (Entity Coverage)
What It Protects: The company itself for certain claims.
When It Applies:
- Securities claims against the company (public companies)
- Some employment claims
- Entity-level regulatory investigations
Key Features:
- Public companies need this for securities liability
- May be limited in private company policies
- Subject to retention/deductible
Coverage Summary
| Side | Protects | Indemnification |
|---|---|---|
| A | D&Os personally | Company won't/can't indemnify |
| B | Company | Company does indemnify |
| C | Entity | Direct claims against company |
Factors Affecting D&O Premiums
Multiple factors influence D&O insurance pricing.
Company Characteristics
| Factor | Impact on Premium |
|---|---|
| Public vs. Private | Public companies pay much more |
| Company size (revenue/assets) | Larger = higher premium |
| Industry | Risky industries pay more |
| Years in business | Longer track record = lower |
| Financial health | Distressed companies pay more |
| Prior claims | Claims history increases rates |
Industry Risk Levels
| Risk Level | Industries | Premium Impact |
|---|---|---|
| Low | Professional services, retail | Baseline |
| Medium | Technology, manufacturing | +20-40% |
| High | Financial services, healthcare | +40-80% |
| Very High | Biotech, securities, crypto | +80-150% |
Coverage Options
| Option | Impact |
|---|---|
| Higher limits | Increases premium |
| Lower deductible | Increases premium |
| Broader coverage | Increases premium |
| Defense inside limits | Lower premium |
| Claims-made policy | Standard |
Public Company Factors
Additional Considerations:
- Market capitalization
- Stock volatility
- SEC filing history
- Class action risk
- Industry litigation trends
- D&O committee quality
D&O Insurance for Different Company Types
Coverage needs vary significantly by organization type.
Private Companies
Key Risks:
- Shareholder disputes
- Employment claims
- Creditor claims
- Regulatory issues
Typical Coverage:
- $1M - $10M limits
- Premiums: $2,000 - $50,000/year
- Lower risk profile
- Side A and B essential
Public Companies
Key Risks:
- Securities class actions
- SEC investigations
- Shareholder derivative suits
- Proxy disclosure claims
Typical Coverage:
- $10M - $100M+ limits
- Premiums: $100,000 - $1M+/year
- Side C essential
- Often multiple towers of coverage
Startups & VC-Backed Companies
Key Risks:
- Investor lawsuits
- Fiduciary duty claims
- Employment issues
- Regulatory compliance
Typical Coverage:
- $1M - $10M limits
- Premiums: $5,000 - $50,000/year
- Investors often require
- EPLI add-on common
Nonprofits
Key Risks:
- Donor disputes
- Employment claims
- Volunteer management
- Regulatory issues
Typical Coverage:
- $1M - $5M limits
- Premiums: $1,000 - $15,000/year
- Lower premiums than for-profits
- Board volunteers need protection
Common D&O Claims
Understanding common claims helps assess your risk exposure.
Securities Claims (Public Companies)
| Claim Type | Description |
|---|---|
| 10b-5 Claims | Material misstatements/omissions |
| Proxy Violations | Misleading proxy materials |
| IPO Claims | Misrepresentations in offerings |
| Insider Trading | Allegations of trading on material info |
Statistics:
- Average securities class action settlement: $20M+
- Defense costs: $10M+ even if successful
- Claim frequency: 4%+ of public companies annually
Employment Claims
| Claim Type | Description |
|---|---|
| Wrongful Termination | Improper firing |
| Discrimination | Protected class bias |
| Harassment | Hostile work environment |
| Wage & Hour | Compensation violations |
Often covered under separate EPLI but may trigger D&O if directed at leadership decisions.
Fiduciary Duty Claims
| Claim | Plaintiff |
|---|---|
| Breach of duty of care | Shareholders |
| Breach of duty of loyalty | Shareholders |
| Self-dealing | Shareholders, creditors |
| Waste of corporate assets | Shareholders |
| Failure to oversee | Shareholders, regulators |
Regulatory Investigations
| Regulator | Types of Issues |
|---|---|
| SEC | Securities fraud, disclosure |
| DOJ | Criminal fraud, antitrust |
| FTC | Consumer protection, privacy |
| State AGs | Consumer fraud, employment |
Bankruptcy-Related Claims
When companies fail, D&Os face heightened risk:
- Breach of fiduciary duty to creditors
- Fraudulent transfer claims
- Preference payment claims
- Failure to file timely bankruptcy
Purchasing D&O Insurance
Strategic considerations when buying D&O coverage.
Key Policy Terms
| Term | Meaning |
|---|---|
| Claims-Made | Covers claims made during policy period |
| Retention | Deductible (often $25K-$500K) |
| Policy Limit | Maximum payout |
| Defense Costs | Inside or outside limit |
| Extended Reporting | "Tail" coverage after policy ends |
Defense Costs: Inside vs. Outside Limits
Inside Limits:
- Defense costs reduce available coverage
- Lower premiums
- Risk: expensive defense depletes coverage
Outside Limits:
- Defense costs in addition to limits
- Higher premiums
- Better protection but more expensive
Selecting Coverage Limits
| Company Type | Typical Limit Range |
|---|---|
| Small private (<$25M revenue) | $1M - $3M |
| Mid-size private ($25M-$100M) | $3M - $10M |
| Large private (>$100M) | $10M - $25M |
| Public company | $25M - $100M+ |
Shopping for D&O Insurance
Best Practices:
- Work with specialized broker
- Get quotes from multiple carriers
- Compare coverage terms, not just price
- Read exclusions carefully
- Consider carrier financial strength
- Evaluate claims handling reputation
Renewal Considerations
- Claims increase premiums significantly
- Market conditions affect pricing
- Company changes require disclosure
- Don't let coverage lapse
Reducing D&O Insurance Costs
Strategies to lower premiums while maintaining protection.
Risk Management Practices
| Practice | Premium Impact |
|---|---|
| Strong corporate governance | -5 to -15% |
| Experienced board | -5 to -10% |
| Claims-free history | -10 to -20% |
| Financial stability | -5 to -15% |
| Compliance programs | -5 to -10% |
Policy Structure Options
Higher Deductibles:
- $50K instead of $25K saves 5-10%
- $100K instead of $50K saves 10-15%
- Consider risk tolerance
Defense Inside Limits:
- Saves 15-25% of premium
- But less total protection
- Common for lower-risk companies
Narrower Coverage:
- Exclude certain claims
- May not be worth savings
- Carefully evaluate exclusions
Corporate Governance Improvements
Board-Level:
- Independent directors
- Audit committee
- Compensation committee
- Regular board meetings
- Documented decision-making
Company-Level:
- Accurate financial reporting
- Strong internal controls
- Compliance training
- Employment practices review
- Regular risk assessment
Insurance Program Design
Layered Coverage:
- Primary layer: $5M
- Excess layer: $5M
- May be cheaper than single $10M policy
- Different carriers share risk
Bundle with Other Policies:
- EPL (Employment Practices Liability)
- Fiduciary liability
- Crime coverage
- Cyber liability
- Package discounts common
Pro Tips
- 💡Work with a broker who specializes in D&O insurance for your company type.
- 💡Get quotes from multiple carriers - pricing varies significantly.
- 💡Read policy exclusions carefully before purchasing.
- 💡Consider Side A DIC coverage for extra personal protection.
- 💡Maintain accurate board meeting minutes and document decision-making.
- 💡Implement strong corporate governance practices to reduce premiums.
- 💡Disclose all potential claims when applying - non-disclosure can void coverage.
- 💡Consider bundling D&O with EPL and other management liability coverage.
- 💡Review coverage annually as your company grows and risks change.
- 💡Don't let coverage lapse - gaps can leave claims uninsured.
- 💡Higher deductibles can significantly lower premiums if you can handle the risk.
- 💡Ensure defense costs are "outside the limits" if budget allows.
Frequently Asked Questions
Premiums vary widely. Small private companies pay $2,000-$10,000 annually for $1-2M coverage. Mid-size companies pay $10,000-$50,000 for $5-10M. Large private companies pay $50,000-$200,000. Public companies pay $100,000-$1M+ due to securities liability. Factors include industry, size, claims history, and coverage limits.
