Does My Startup Really Need D&O?

leadership-300x168“Does my startup really need D&O?” It’s a common question among young tech entrepreneurs. Our answer would be this: if you’re looking to raise seed funding, having Directors & Officers (D&O) coverage in place will make you infinitely more attractive to investors.

Appropriately structured D&O coverage protects the personal liability of Directors and managers of the business, including any representatives of the VC who will be sitting on your board. This important coverage includes defense costs for your directors and officers, as well as settlements and judgments related to allegations of mismanagement or breaches in their fiduciary duties in conducting company business.

One in six company executives (17%) surveyed by Inc. Magazine believe that their business will experience a D&O-related loss within the next year. D&O is typically listed as a term sheet requirement, so having this important coverage in place before you’ve received funding will go a long way to giving potential investors financial peace of mind when considering your company as a portfolio.

If you’re a young firm looking to raise capital, contact us today about D&O insurance. We can design coverage that suits your needs and demonstrates to potential investors that you mean business.