Directors & Officers Insurance

Directors & Officers insurance — commonly abbreviated D&O — protects the individuals who serve on boards or in officer roles from personal financial loss if they are sued for decisions made while performing those duties. Wealthy families frequently encounter D&O exposure in places they may not immediately anticipate: a family foundation, a closely held operating company, a family limited partnership, or even a co-investment vehicle. Without D&O coverage, a lawsuit challenging a board decision could reach a director's personal assets.

Family offices that coordinate governance across multiple structured entities often review D&O needs entity by entity, because a policy covering one entity may not extend to another. A family member who sits on the board of both a private operating company and a charitable foundation may need separate policies — or a carefully written policy that explicitly names both entities — to be fully covered.

A concrete example: imagine a founder who sold her logistics company and then serves as a board member of the resulting family foundation and a new portfolio company. If a grant recipient or a minority shareholder brings a legal claim against the board, D&O insurance is designed to cover defense costs and potential settlements arising from that board role. Families commonly work with insurance counsel and qualified attorneys to ensure the policy language actually matches the entities and roles involved, since gaps in coverage are a frequent source of surprise.