Directors and officers insurance
Coverwatch places directors and officers insurance for private companies, nonprofits, and HOA boards. We structure the Side A, B, and C grants and the retroactive date so the policy pays when a board member is sued personally.
Why Coverwatch
- Markets
- Specialists that protect private-company, nonprofit, and HOA board members most agents never reach.
- Competition
- 60+ markets head to head on whether your board and company are both protected, not just price.
- Endorsements
- Whether the company itself is covered, and claims between insiders.
At a glance
- What it covers
- The personal liability of directors, officers, and board members for management and governance decisions.
- What it doesn't
- Bodily injury, property damage, and an individual's own fraud or illegal personal profit.
Trusted by 60+ carrier partners
What does directors and officers insurance cover?
Directors and officers insurance covers directors, officers, and board members when they are personally sued for a management-role wrongful act, such as breach of fiduciary duty, mismanagement, or misrepresentation. It pays legal defense, settlements, and judgments, and reimburses the organization when it indemnifies its leaders. It excludes bodily injury and fraud.
How we get you covered
We take directors and officers insurance to 60+ markets, build it to fit your business, and keep it compliant.
Read your risk
We map what could actually go wrong in your operation, where a claim would come from, and who would bring it.
Shop 60+ markets
We take your risk to the carriers that know your class and make them compete on price and terms.
Build the endorsements
We add the endorsement wording that decides whether the policy responds to a claim, beyond the base form.
Keep you compliant
We handle the COIs, additional-insured certs, and renewals, so you are never the one chasing paperwork.
Who needs directors & officers
Any organization with a board or governing leadership: private companies, nonprofits, and especially HOA and condo boards, where volunteer directors carry personal exposure.
Industry
Homeowners associations
HOA and condo boards are a core D&O buyer. Volunteer directors are sued personally over assessments and architectural and rules decisions, and many states set a statutory D&O minimum that caps that personal liability.
Industry
Property management
Management firms run the operations and finances of properties they do not own, which creates fiduciary and governance exposure for their own officers and the boards they advise.
Commercial property management
Officers make financial and lease decisions on behalf of owners, a fiduciary exposure D&O answers.
Residential property management
Manages tenant funds, HOA accounts, and owner trust money, where mismanagement claims name the firm's leaders.
Multifamily property management
Larger portfolios and outside investors raise the severity of a fiduciary or misrepresentation claim against management.
Industry
Restaurants
Multi-unit groups with outside investors and a real governance structure carry D&O to protect the operators making management and financial decisions.
Industry
Ecommerce
Funded consumer brands with investors and a formal board carry D&O so the founders and directors are protected in a mismanagement or misrepresentation claim.
What's covered, and what isn't
In the policy
Breach of fiduciary duty claims
Allegations that a director or officer failed their duty of care or loyalty, mismanaged assets, or made a decision against the organization's interest.
Side A: non-indemnifiable loss
Pays directors and officers directly when the organization cannot or will not indemnify them.
Side B: company reimbursement
Reimburses the organization when it advances defense costs or indemnifies its directors and officers, which is the most common way claims are paid.
Side C: entity coverage
Covers the organization itself when it is named as a co-defendant alongside its leaders, typically in securities or management claims.
Regulatory and investigation defense
Defense costs when a regulator, attorney general, or agency investigates the conduct of officers in their management role.
Not in the policy
Employment claims by staff
Wrongful termination, harassment, and discrimination suits brought by employees are an employment exposure, not a governance one.
Covered by Employment Practices Liability
Professional service errors
A mistake in the professional service the organization sells, rather than a governance decision by its board.
Covered by Professional Liability
Data-breach and privacy liability
Liability from a breach of member or customer data is a cyber exposure.
Covered by Cyber Liability
Bodily injury and property damage
A slip-and-fall in the lobby or physical damage to property is a general liability or property loss, not a management decision.
Covered by General Liability
Fraud and illegal personal profit
Deliberate fraud, criminal acts, and any personal gain a director was not legally entitled to are conduct exclusions.
Claims directors & officers pays
HOA homeowner sues the board
A homeowner sues the association's board personally after the board denies an architectural request or levies a special assessment.
$50K–$500K+
Investor or member mismanagement claim
A shareholder or member alleges the directors mismanaged funds, misrepresented the organization's finances, or breached their fiduciary duty.
$100K–$2M+
Regulatory investigation of officers
A state attorney general or regulator opens an investigation into the conduct of an organization's officers.
$75K–$1M+
Wrongful termination naming the board
A departing executive sues the nonprofit and names individual board members in the employment claim.
$50K–$500K+
Ranges are typical defense and settlement bands for these claim types, not a quote. Actual exposure depends on the organization's size, structure, and limits.
How much coverage you need
There is no standard limit. Two things decide what you actually need, and you carry whichever is higher.
- Your statutory or governing-document floor
- HOAs in some states have a statutory minimum, and many bylaws, lender covenants, and lease or financing agreements set a required D&O limit. You cannot drop below the floor your governing documents and state law impose.
- What a governance claim could cost you
- Severity sets the ceiling. A larger organization, a bigger board, outside investors, or paid staff all raise the size of a realistic worst-case claim. Defense alone on a single D&O claim averages six figures, so size to that, not to the average.
- California HOAs (Civ. Code 5800)
- $500K / $1M
- Nonprofit grantors and funders
- $1M typical
- Lenders and landlords
- Varies by agreement
California requires $500,000 in D&O for associations with 100 or fewer separate interests and $1,000,000 for larger ones, and meeting the floor caps a volunteer director's personal liability.
Many foundations, government grants, and major donors require the nonprofit to carry D&O before releasing funds, with one million the common floor for organizations with paid staff.
Commercial loan covenants and some leases require the borrowing or tenant entity to maintain D&O at a stated limit for the life of the agreement.
- Each claim / aggregate
- $1,000,000
- Retention (deductible)
- $5,000–$25,000
- Defense
- Inside the limit
- Retroactive date
- Policy inception or earlier
D&O is usually written with a single shared limit that applies per claim and as the most the policy pays for all claims in the policy year combined. Once it is exhausted, coverage ends until renewal.
The amount the organization pays on each claim before the insurer pays, similar to a deductible. Side A non-indemnifiable loss usually carries no retention, so an individual director is protected from the first dollar.
On most D&O policies, lawyers' fees are paid from the same limit as settlements, so a long defense shrinks what is left to settle. This is the opposite of general liability, where defense sits outside the limit.
The date that sets how far back a covered wrongful act can reach. A claim filed today over a decision made before this date is not covered, which is why continuous renewal matters.
Endorsements that close the gaps
The base form is the start. These add-ons are where the policy gets built to fit your business.
Employment practices liability (EPL)
Adds coverage for staff suits over hiring, firing, harassment, and discrimination, which base D&O excludes.
Entity coverage (Side C)
Extends the policy to the organization itself when it is named alongside its directors.
Outside directorship liability (ODL)
Covers a director who serves on another organization's board at your request, so a board seat on a subsidiary, joint venture.
Extended reporting period (tail)
On a claims-made policy, lets you report claims after the policy ends for wrongful acts that happened during the term.
Questions buyers actually ask
A D&O policy has three insuring grants, and each answers a different version of the same suit. Side A pays directors and officers directly when the organization is insolvent, legally barred, or refuses to indemnify them, so it protects an individual's personal assets. Side B reimburses the organization when it does indemnify its leaders or advance their defense, which is how most claims actually get paid. Side C, entity coverage, protects the organization itself when it is named as a co-defendant alongside its directors. Together they make sure the loss lands on the policy, whether the individual or the company is sued. It does not fall on a board member's home or the entity's balance sheet.
Yes. Volunteer status is not a legal shield. A homeowner can sue the board personally over a special assessment, an architectural denial, or selective rules enforcement, and these decision challenges are the leading cause of HOA D&O claims. Many states make D&O effectively mandatory. California Civil Code Section 5800 caps a volunteer director's personal liability only if the association carries the required D&O limit. That floor is $500,000 for associations with 100 or fewer separate interests, and $1,000,000 for those with more than 100. Without the coverage, the board member pays the legal defense out of pocket. Most HOA suits aim to overturn a decision, not win damages, so that defense cost shows up no matter how the case ends.
Claims-made means the policy that responds is the one in force when the claim is first made against you, not the one in force when the underlying decision was made. This is different from an occurrence policy. It has two consequences. First, the retroactive date matters. A claim filed today over a wrongful act before that date is not covered, which is why boards keep coverage continuous across renewals. Second, if you cancel, dissolve, or switch carriers, you need an extended reporting period (a tail). It lets you report claims that arrive after the policy ends, for acts during the term. Letting a claims-made policy lapse without a tail can leave years of past governance decisions uninsured.
Base D&O usually does not. Suits by employees over wrongful termination, harassment, or discrimination are an employment exposure, and the standard D&O form excludes them. The fix is an employment practices liability grant, which many private companies and nonprofits add to D&O under a single management liability policy. The overlap appears when a fired executive sues the organization and also names individual board members. In that case the governance allegations against the directors fall to D&O while the employment counts route to the EPL grant. Boards with paid staff should confirm both coverages are in place rather than assuming D&O answers a personnel dispute.
Both, but through different grants. The individual directors and officers are protected by Side A when the organization cannot indemnify them and by Side B when it can. The organization itself is protected only if the policy includes Side C, entity coverage, which responds when the entity is named as a co-defendant alongside its leaders. Without Side C, one suit names both the board and the company. That triggers an allocation fight over how much of the loss is the directors' covered share and how much is the entity's uninsured share. Most private company and nonprofit policies now include entity coverage, but it is worth confirming, because the gap surfaces only when both are sued together.
Focus on the work.
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Send us your policy and a licensed advisor checks your directors & officers against 60+ carriers, flagging gaps and overpricing. If your limits already hold up, we'll tell you.
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