Actions brought against directors and officers based upon actual or alleged wrongful acts arising from the execution of their day-to-day duties and management functions can result in a D&O claim. D&O liability insurance protects the personal assets of directors and officers from catastrophic financial loss in the event of such a claim. The D&O policy also provides coverage for the organization.

It is common for directors to require that a company purchase D&O liability insurance before they serve on its board. Litigation expenses alone can amount to millions of dollars. D&O coverage can help protect the directors and officers from personal financial loss relating to these expenses.