Startup Insurance Requirements
Written by Aparna Devalla, CPA
Curated by Rubric Financial
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Directors & Officers (D&O) Insurance
- D&O insurance protects company directors and officers from personal liability for decisions made on behalf of the company, covering legal fees, settlements, and judgments.
- Most venture capital investors require D&O coverage as a condition of investment and board participation; expect this to be a term sheet requirement at your seed round.
- Coverage typically includes Side A (protects individual directors when the company cannot indemnify), Side B (reimburses the company for indemnifying directors), and Side C (entity coverage for securities claims).
- Annual premiums for early-stage startups typically range from $3,000 to $10,000, increasing with company size, industry risk, and claims history.
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