How to judge any D&O policy: questions to ask before you sign

A policy looks great on paper. But a real crisis doesn't follow the script — and the clauses nobody read at purchase are exactly the ones that decide whether a director is protected when it matters.

D&O is one of those covers where the price and the headline limit tell you very little. The protection lives in the wording. Below are the checks that actually separate policies — phrased so you can hold any broker to them, not just us.

The eight checks

1. Are defence costs advanced?Does the insurer pay legal bills as they arrive, or only after the case ends? For an individual director facing a well-resourced opponent, that timing is the difference between a real defence and a forced settlement.
2. Is there a dedicated Side A limit?Side A protects individuals when the company can't indemnify them. A dedicated, ring-fenced Side A limit means that protection isn't exhausted by company-level claims first.
3. How long is the run-off period?After a director leaves or the company is sold, claims can still arrive for past acts. The run-off (or "tail") period decides how long they stay covered.
4. Are regulatory investigations covered?In India, a large share of exposure comes from inquiries by regulators, not just lawsuits. Confirm the cost of being represented through an investigation is included.
5. What's the retroactive / prior-acts date?Claims-made policies only respond if the wrongful act happened after a set date. A restrictive retroactive date can quietly exclude years of past decisions.
6. How are claims actually handled?Who manages the claim, and how fast? A single, dependable point of contact matters far more on the worst day than a marginally lower premium.
7. Who exactly is insured?Confirm cover extends to past, present and — where needed — future directors and officers, and to the specific people you intend to protect.
8. What's excluded?Read the exclusions before the benefits. Knowing what won't be paid is more useful than admiring what might be.

Three questions for your next board meeting

If the eight checks are more than you want to carry into a room, take three. These are the ones that, asked out loud, tell you quickly whether your cover has been thought about or just bought.

1. What's our sum insured — and when was it last benchmarked?A limit set years ago against a smaller company may now be badly short of the exposure.
2. Do our independent directors have a dedicated Side A limit?It's the protection they personally rely on if the company can't indemnify them.
3. How long is our run-off, and does it cover regulatory investigations?The two places cover most often falls short, quietly, until a claim arrives.

Put those eight checks — or just the three — to any broker you're considering. A broker who can only really answer the first one or two has told you something useful before you've signed anything. That diagnostic work, and being reachable when a claim lands, is what a broker is actually for; it's the standard we'd want you to hold any D&O broker, including us, to.

This is a general checklist for evaluating a D&O policy and broker — it isn't advice on a specific policy or insurer, and nothing here is an offer. Still mapping which cover you need? Start with what D&O covers or D&O vs EPLI vs general liability. How each check applies depends on your company and the wording in front of you, which is what a conversation is for.

A note on this page. Everything here is general information, not insurance, legal, financial or tax advice, and nothing is an offer. For advice about your situation, talk to us.