How Does D&O Insurance Work for Startup Founders and What It Won't Cover

How Does D&O Insurance Work for Startup Founders and What It Won't Cover

How does D&O insurance work for startup founders? It pays your personal legal defense when an investor, employee, regulator, or bankruptcy trustee sues you directly, but only within the limits of what the policy actually covers. Founders who wait until a Series A term sheet forces the issue often miss the exclusions, from fraud carve-outs to the insured-versus-insured clause, that decide whether the policy actually pays out when it matters most.