Does startup fundraising mean I need directors and officers (D&O) insurance?
Fundraising alone does not settle the D&O decision. Check the actual investor, board, or financing wording and ask the broker to compare it with the proposed form.[4]
Identify whether D&O is written as a request, a condition, or a negotiated term.[4]
Ask who is an insured person or entity, which management claims and defense costs are addressed, and what exclusions, limits, and application statements apply. Review the proposed form.[4]
Read the Startup Insurance Basics Insurance Buying Guide
Sources and Further Reading
- Commercial Insurance Guide — California Department of Insurance. Commercial Insurance Guide: commercial property, business interruption, commercial general liability, and rating a commercial insurance policy; revised June 14, 2024.
California guide to commercial property, general liability, business interruption, and quote-rating factors.
- Cyber Insurance — Federal Trade Commission. What Should Your Cyber Insurance Policy Cover?; First-Party Coverage; Third-Party Coverage.
FTC small-business examples for first-party and third-party cyber coverage; compare them with the actual quote.
- Cyber Insurance Coverage & Products — Chubb. DigiTech Enterprise Risk Management; Professional Enterprise Risk Management; Cyber Insurance Coverage; First-Party Coverage.
Chubb-attributed technology E&O and cyber interruption examples; product summaries are not the buyer’s policy wording.
- Small Business ForeFront Portfolio 3.0 for Private Companies — Chubb. Coverage Highlights; Directors & Officers; Key Features.
Chubb’s private-company coverage highlights include D&O; this does not establish a universal fundraising requirement.
- Health Care Insurance Coverage for Self-Employed Individuals — HealthCare.gov, Centers for Medicare & Medicaid Services. Marketplace coverage for self-employed people; job-based coverage; spouse coverage.
Current federal Marketplace guidance for founders with no employees and loss of job-based coverage.
- Covered California for Small Business — Covered California. What You Can Do With CCSB; self-employed people with no W-2 employees; applicable large employer summary.
California group-health plan choices and the individual-plan route for self-employed people with no W-2 employees.
- Determining if an Employer Is an Applicable Large Employer — Internal Revenue Service. Basic Information; Full-Time and Full-Time Equivalent Employees; Aggregation Rules; Seasonal Workers; New Employers.
IRS explanation of prior-year full-time and FTE counting, aggregation, seasonal workers, and new-employer rules.
- Answers to Frequently Asked Questions for Employers — California Department of Industrial Relations, Division of Workers’ Compensation. About Insurance Coverage; employee requirement, sole proprietors and officers; FAQ page dated March 2023.
California-specific workers’ compensation employer guidance, including employee and business-structure questions.
- Employer Information — California Department of Industrial Relations, Division of Workers’ Compensation. Employer information for businesses with employees working in California, including out-of-state employers.
California DWC example for out-of-state employers with employees who work in California.
Spot, a product of Tools for Enlightenment, publishes this guide and works in the commercial insurance market. This is general buyer education; policy terms and state-specific obligations determine coverage and requirements.
Updated 2026-09-28. Editorial Policy
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