Directors & Officers (D&O) Insurance Cost Calculator (2026)

Directors & Officers (D&O) insurance protects individual directors and executives from personal liability for management decisions made on behalf of the company. Most venture investors require D&O as a condition of investment, and independent board members typically won't serve without it. Private-company D&O in 2026 costs $5K-$25K/year for $1M-$5M limits.

The Three Sides Of D&O

Side A pays the individual director when the company cannot indemnify them — typically because of insolvency, bankruptcy, or a derivative suit (shareholders suing the directors on behalf of the company). Side A is the most important coverage for individual directors. Side B reimburses the company for indemnifying its officers (most company bylaws require maximum indemnification). Side C, also called entity coverage, pays the company itself for securities claims. Many startups buy Side A only with low limits, then expand to A+B+C as they raise institutional capital.

Why VCs Require D&O

VCs require D&O for three reasons. (1) They typically take a board seat — and won't expose their fund partners to personal liability without insurance. (2) The independent directors they recruit (a CFO, an industry veteran) won't serve without D&O. (3) D&O signals corporate governance maturity. Standard VC term sheets require $1M-$3M D&O at Series A, $3M-$5M at Series B, $5M-$10M at Series C+. Most carriers also require employment practices liability (EPL) coverage paired with D&O — EPL covers wrongful termination, discrimination, and harassment claims that often come up in startup wind-downs.

Last updated May 2026. Sources: III D&O Insurance.