Do Startups Get D&O insurance?

Directors and officers are bound by duty towards various stake holders. Any breach or non-performance in the duties can result in claims against them by reason of any wrongful act, actual or alleged, in their respective capacities.

Directors and Officers (D&O) Insurance provides for financial protection in the event of a claim alleging a wrongful act in a managerial or supervisory role of the director, or an officer in the organisation.

Companies of all sizes need to purchase a D&O liability insurance.

Startups are sometimes vulnerable, agile and less risk-averse than other companies. The directors in a Startup often make decisions quickly to get to the market, capture the value and hence might not have the time to evaluate all potential risks. Therefore the probability for a D&O claim is naturally high for startups.

Even if a Startup is securing funding to get business going, investors will request for the Startup to have D&O insurance because they are looking to place someone on the board who becomes party to majority of crucial decisions the Startups take. Having a D&O liability insurance will ensure that these individuals’ personal assets will be protected against claims while they are acting in their capacity as a director on the board of the Startup.

PlanCover has been providing guidance and support for Startups in all domains. Once your Startup is operational, have a business model working, started acquiring customers and getting interests from investors the next step is to contact PlanCover to help in structuring suitable, affordable and best insurance for your business.