Every decision your board and executives make can be questioned - by investors, creditors, regulators, employees, donors, or competitors. When that happens, the personal assets of your directors and officers are on the line, along with your organization’s balance sheet. Directors & Officers liability insurance covers the cost of defending those claims and the settlements or judgments that can follow.
Frankel & Associates has helped California businesses manage risk since 1988. We place D&O coverage for both for-profit companies and non-profit organizations, and we tailor every policy to how your organization is actually run.
What D&O insurance covers
A D&O policy responds to claims alleging a “wrongful act” in the management of the organization, such as:
- Breach of fiduciary duty or mismanagement of company funds
- Misrepresentation to investors, lenders, or donors
- Failure to comply with regulations or bylaws
- Decisions that harm shareholders, members, creditors, or competitors
- Claims arising from mergers, acquisitions, or major transactions
Coverage typically includes three parts:
- Side A - protects individual directors and officers when the organization cannot indemnify them
- Side B - reimburses the organization when it does indemnify its leaders
- Side C (entity coverage) - protects the organization itself for covered claims
Defense costs are covered as well, and for many claims that is where most of the money goes - legal bills add up long before any settlement is reached.
D&O for for-profit companies
Private companies sometimes assume D&O is only for public corporations. In practice, private businesses face D&O claims from all sides:
- Investors and shareholders - disputes over valuation, dilution, disclosures, or the direction of the company
- Creditors and lenders - claims that leadership decisions caused a default or insolvency
- Regulators - investigations and enforcement actions at the state or federal level
- Competitors and business partners - claims over contracts, poaching, or unfair business practices
For growing companies, D&O coverage is often a requirement before venture or private equity money comes in. Investors want to know the board they are joining is protected. A well-structured policy also helps you recruit experienced executives and board members who will not take a seat without it.
D&O for non-profit organizations
Non-profit boards are usually volunteers, serving because they believe in the mission. That does not shield them from personal liability. Non-profit D&O claims commonly come from:
- Employees - wrongful termination, discrimination, and harassment claims
- Donors and grantors - disputes over how funds were used or whether restrictions were honored
- Members - challenges to elections, bylaws, or board decisions
- Regulators - state attorney general oversight of charities and tax-exempt status issues
Employment claims are the most frequent source of claims against non-profit boards - see our Employment Practices & Liability coverage. Non-profit D&O is typically affordable, many funders and umbrella organizations require it, and it is one of the strongest board recruitment tools a non-profit has: qualified people join boards more readily when they know their personal assets are not at risk.
Who needs D&O insurance?
- Privately held companies with outside investors, lenders, or a board
- Startups raising capital or planning an exit
- Family businesses with multiple stakeholders
- Non-profit organizations of any size with a board of directors
- Associations, foundations, and religious organizations
Why Frankel & Associates
- Independent brokerage - we shop the nation’s leading carriers to match coverage and premium to your organization
- Serving Los Angeles and all of California since 1988
- A+ BBB accredited, with personal service from brokers who know your account
- Guru, our AI assistant, is available 24/7 on the site for questions, certificates, and quote requests
Frequently asked questions
Does my general liability policy cover board decisions?
No. General liability covers bodily injury and property damage. Claims about management decisions - fiduciary duty, misrepresentation, mismanagement of funds - are only covered by D&O.
Our company is small and privately held. Do we still need it?
Small companies are not immune. Claims from investors, creditors, competitors, and regulators hit private companies too, and defense costs alone can be significant.
Our non-profit board is all volunteers. Are they personally exposed?
Yes. Volunteer status does not prevent a director from being named personally in a lawsuit. D&O coverage defends them and protects their personal assets.
Is employment practices liability included?
Employment claims are the most common claims against leadership. Depending on the carrier, EPL can be packaged with D&O or written separately. See our Employment Practices & Liability page or ask us which structure fits you.
Get a D&O quote
Tell us about your organization and we will come back with options from leading carriers. Start a quote online, chat with Guru right here on the site, or call us at (800) 696-3023.