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Directors and Officers (D&O) Liability Insurance
For private companies, D&O liability insurance is a necessary part of protecting your business from possible crippling legal fees. Get a quote and buy insurance for your business in under five minutes, entirely online.
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We've partnered with Gallagher, one of Canada's leading insurance brokers, to provide insurance designed for businesses and business professionals. Get professional liability, general liability, and/or contents insurance designed specifically for your profession.
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What D&O Insurance Helps You Navigate
Internal Disputes
Claims between board members or executives, especially in high-growth or high-stress environments.
External Allegations
Suits from investors, clients, vendors, or regulators, even if unfounded.
Reputational Damage
Legal action can create headlines. D&O coverage helps you respond quickly and responsibly.
Why You Need Private D&O Insurance
Even with a great team, mistakes happen.
Directors and officers can face lawsuits for a variety of reasons, whether it's from a dissatisfied client or due to an accidental or perceived breach of regulatory requirements.
If a member of your team is sued for something that they’ve done in their role, private D&O insurance protects them from suffering personal financial losses and helps cover any legal fees.
If your a security commission believes that one of your senior members is engaged in fraud, they can take your company to court for an expensive legal case, even if no fraud has been committed.
Making sure your company’s high ranking officers have D&O liability insurance can protect you from having to pay these possibly expensive fees.
With all these risks associated with the role of a company’s directors and officers, D&O insurance is a necessary policy to protect your team from any defence costs and loss of personal assets.
FAQs About Directors and Officers Insurance
What is Directors and Officers Insurance?
D&O insurance protects a company’s leadership, including directors, officers, and board members, from personal financial loss if they’re sued for decisions made on behalf of the organization.
Who needs D&O insurance?
Any organization with decision-makers can benefit from D&O coverage. That includes private companies, non-profits, and startups, not just large public corporations. If you have a board or leadership team, you have exposure.
What does D&O insurance cover?
It covers legal defence costs, settlements, and judgments arising from claims of mismanagement, breach of fiduciary duty, regulatory violations, or other leadership-related actions. It can also cover costs related to investigations or shareholder disputes.
What’s not covered by D&O insurance?
D&O insurance typically doesn’t cover intentional illegal acts, fraud, or bodily injury/property damage (which falls under other policies like General Liability). It also may not cover disputes between directors unless specifically included.
It’s important to note that legal fees associated with a court case involving any criminal activity, such as outright fraud, are often not covered with D&O insurance.
What's the difference between D&O and Professional Indemnity Insurance?
Both Professional Indemnity (PI) and Directors and Officers (D&O) insurance offer liability protection, but they cover different risks.
Professional Indemnity Insurance (also known as Errors & Omissions) protects businesses that provide advice or services. If a client claims your work caused them financial harm, this policy covers legal fees, settlements, and defence costs. It’s essential for consultants, financial advisors, architects, doctors, and similar professions.
Directors and Officers Insurance protects your leadership team — including directors, executives, and board members — from personal liability if they’re sued over decisions made on behalf of the company. This includes claims of mismanagement, breach of duty, or regulatory issues.
Does D&O insurance cover past directors or retired board members?
Yes. Most D&O policies include “tail coverage,” which protects former directors and officers for actions taken during their time in leadership, even after they’ve left the organization.
Is D&O insurance required by law?
No, but it’s often required by investors, lenders, and board members before joining an organization. It’s also considered best practice for risk management, especially in regulated or litigious industries.
How much does D&O insurance cost?
Pricing varies based on your organization’s size, industry, revenue, and claims history. Smaller organizations may pay a few hundred dollars annually, while larger or higher-risk companies may pay more. With APOLLO, quotes are fast, easy, and tailored to your needs.
What’s the difference between D&O and E&O insurance?
D&O (Directors and Officers) insurance protects leadership for decisions made in their role, while E&O (Errors and Omissions) insurance covers professional mistakes made during service delivery. Many businesses need both.
What Does Directors and Officers Liability Cover?
Private directors and officers insurance covers any settlements, defence costs, and financial losses associated with claims brought against your company. Typical claims include:
Lack of Corporate Governance
This is typical of companies with a corrupt board of governors. Nepotism, corruption, and a general lack of governance are common examples of this claim.
Creditor Claims
If a company owes money to a bank or crediting agency and doesn’t pay it, they can come after the business to pay back the amount due. This can cause the company to go bankrupt, depending on the amount owed.
Breaches of Fiduciary Duty
This common type of D&O claim happens when a company has a responsibility to act in the best interests of a client but fails to do so. Common examples are sharing trade secrets or improper use of funds.
Failure to Comply With Regulations
A company is in danger of failing to comply with regulations when they don’t take into account the legal requirements of the task they’ve been hired to complete.
Reporting Errors
If your shareholders or investors learn that any data you’ve reported has been false or manufactured, they can come after you for a breach of trust.
How Much Does Directors & Officers Insurance Cost in Canada?
It depends on your unique business, but it’s almost always cheaper than a legal battle.
Whether you’re running a startup, scaling a non-profit, or managing a national organization, D&O insurance is designed to protect decision-makers like you from personal financial risk. It’s often far more affordable than you’d expect, especially when you consider what’s at stake.
With APOLLO, you can get a personalized quote in minutes, with coverage options customized for your boardroom.
Here's what impacts the cost of your policy:
Your Company’s Size and Structure
The more complex the organization, the more potential points of exposure.
A small board might pay less than a national operation with multiple subsidiaries — but both need protection.
Industry Risk Profile
Not all sectors carry the same level of scrutiny.
For example, fintech and biotech companies often operate under stricter regulations than local nonprofits or service businesses, which can influence pricing.
Revenue and Funding
Whether you’re generating revenue or receiving funding, your financial footprint plays a role.
Larger numbers don’t just mean more success — they may also bring higher stakes and expectations.
Claims History (or Lack Thereof)
No past claims? That works in your favour.
A history of claims doesn’t mean you can’t get coverage, but it can influence your rate.
Public vs. Private Status
Public companies often face greater legal and regulatory oversight.
That higher exposure is reflected in your policy price — but the right coverage can be the safety net that saves your leadership.
Real Data. Real Pricing.
At APOLLO, we don’t do ballpark quotes or cookie-cutter policies.
Three Misconceptions About D&O Insurance
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“We’re too small to be sued.”
Wrong. Small organizations are often more vulnerable because they have fewer resources to fight back.
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“We already have general liability.”
General liability covers physical damage or injury, not claims against your leadership team for how they run the company.
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“Only public companies need D&O.”
Private companies, nonprofits, and startups can face the same legal risks — sometimes more, especially from investors or regulators.
Insurance Is a Business Essential, Not Just a Backup Plan
Directors and Officers Insurance does more than shield your leadership team when something goes wrong. It reinforces your governance, attracts stakeholders, and sets your organization up for long-term success. Here’s how D&O coverage supports your growth:
Earn investor confidence - Whether you’re raising capital or applying for grants, stakeholders want to know their investment is protected. D&O insurance helps build credibility and trust from day one.
Attract top board talent - Experienced directors won’t join a board without coverage. A D&O policy shows you take governance seriously and are committed to protecting those who serve.
Say yes to bigger opportunities - Planning to expand, go public, or enter new markets? D&O insurance helps you meet legal and regulatory expectations that come with scaling up.
Safeguard your mission - For nonprofits and purpose-driven organizations, a single legal dispute could derail years of work. D&O ensures your leadership stays focused on impact instead of courtrooms.
Be ready when the unexpected happens - Even well-intentioned decisions can trigger legal action. D&O covers legal defence, settlement costs, and investigation expenses, so your leaders aren’t left personally exposed.
Three Ways D&O Insurance Strengthens Your Business
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Builds Trust with Investors and Partners
Having coverage shows you're serious about risk and governance, which is a big plus during funding rounds or acquisitions.
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Protects Talent and Leadership
Great leaders won’t take on personal risk without protection. D&O coverage helps you attract and retain board members.
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Supports Long-Term Stability
Litigation can drain your time, focus, and resources. With D&O, your leadership can keep moving forward, even under pressure.
PRO TIP: Know your board and investor requirements early.
Different stakeholders may expect specific D&O coverage limits or clauses. Clarifying those upfront can help you avoid delays. With APOLLO, you get instant access to policy documents, so you're always ready to share proof of coverage.
Liability Quiz
Can I really be personally sued for decisions I make as a director?
Yes. If you're on a board or in an executive role, you can be held personally liable for things like mismanagement, breach of fiduciary duty, or non-compliance, even if you acted in good faith.
We’re a small private company. Do we actually need D&O insurance?
Absolutely. Private companies face D&O claims too, often from investors, vendors, regulators, or even former employees. In many cases, they’re more vulnerable than public companies because they have fewer resources to fight a lawsuit.
Do I still have to pay to defend a claim if it's baseless?
Yes. Even if the claim has no merit, legal defence costs can quickly climb into the tens of thousands. D&O insurance covers those costs, so you’re not paying out of pocket to prove you did nothing wrong.
Does this protect volunteer board members at a nonprofit?
Yes. Volunteers can still be named in lawsuits and held personally liable. D&O insurance protects them just like it would protect executives in a for-profit company, which is why many people won’t join a board without it.
What happens if I leave the board and someone files a claim later?
Most D&O policies include “tail coverage,” which protects former directors and officers for actions they took while in their role, even if the claim comes months or years after they’ve stepped down.
The Cost of Not Having Directors and Officers Insurance
Scenario | Out-of-Pocket Cost (Without Insurance) | Covered By Insurance? |
|---|---|---|
A board member is personally sued by an investor after a downturn in company performance. | $25,000–$250,000+ (legal fees + potential settlement) | ✔ Directors & Officers |
A government regulator investigates your leadership team for alleged non-compliance. | $10,000–$75,000+ (legal defence + time) | ✔ Directors & Officers |
A former employee alleges mismanagement or wrongful dismissal by the executive team. | $15,000–$100,000+ (lawsuit and mediation costs) | ✔ Directors & Officers |
A director resigns after learning there's no personal liability protection in place. | Loss of experienced leadership + potential delays in recruitment | ✔ Leadership Confidence |
You lose investor interest because you can’t show proof of proper governance protection. | $50,000–$500,000+ (missed funding or stalled growth) | ✔ Policy Certificate |
Allegations of breach of fiduciary duty force leadership to pause strategic decisions. | Thousands in disruption-related losses | ✔ Risk Mitigation via D&O |
Top 5 Mistakes Leadership Teams Make (And How to Avoid Them)
1. Assuming personal assets are protected by the company
They’re not. Without D&O insurance, directors and officers can be personally liable for legal costs — even if the organization itself has coverage.
2. Waiting until there's outside pressure to get insured
Board members, investors, and lenders often expect D&O coverage to be in place before engaging. Don’t let lack of insurance slow down your funding, hiring, or strategic decisions.
3. Overlooking risks in smaller or private organizations
D&O claims aren’t just for large public companies. Private companies, startups, and nonprofits face leadership-related lawsuits more often than you think, often from internal disputes or regulatory issues.
4. Forgetting to revisit coverage during periods of growth
Expanding into new markets, raising capital, or adding board members? Your risk profile changes, and so should your policy. APOLLO makes updates easy so your protection grows with you.
5. Underestimating the cost of a claim
Even unfounded allegations can cost thousands in legal fees. D&O insurance helps ensure that one accusation doesn’t put your leadership, or your organization, at financial risk.